ETH and BTC and Returns to Sub-$1,250 and $18,500 in the Fed’s Hands

Key Insights:

• After Monday’s bearish session, bitcoin (BTC) and ethereum (ETH) were back in the red this morning.
• Fed fear and the likely effects of Fed monetary policy on the global economy continue testing crypto investor sentiment.
• The technical indicators remain bearish ahead of this week’s US CPI report.

On Monday, bitcoin (BTC) fell by 1.63%. Reversing a 0.13% rise from Sunday, BTC ended the day at $19,128. The bearish session left BTC short of $20,000 for the third session in a row, while BTC also managed to avoid sub-$19,000.

A bullish start to the day saw BTC strike an early high of $19,527. However, falling short of the First Major Resistance Level (R1) at $19,556, BTC slid to a late low of $19,000. BTC fell through the First Major Support Level (S1) at $19,329 and the Second Major Support Level (S2) at $19,214 to end the day at $19,128.

Ethereum (ETH) fell by 2.49%. Reversing a 0.53% gain from Sunday, ETH ended the day at $1,290.

Tracking the broader market, ETH rose to an early high of $1,338. ETH broke through the First Major Resistance Level (R1) at $1,332 before sliding to a final-hour low of $1,288.

The extended sell-off saw ETH fall through the First Major Support Level (S1) at $1,310 and the Second Major Support Level at $1,298 to end the day at $1,290.

External market forces sent the BTC, ETH, and the broader crypto market into negative territory. This morning, the narrative remained the same. Fears of an escalation in the war in Ukraine, Fed monetary policy, inflation, and economic uncertainty weighed on riskier assets.

Overnight, Fed Vice President Brainard and JPMorgan Chase & Co (JPM) CEO Jamie Dimon delivered their views on the economic outlook. Neither painted a rosy picture, with Dimon talking of the likelihood of the US and global recessions in six to nine months.

The negative tones contribute to the bearish Monday session and this morning’s pullback.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.14% to $19,102. A bearish morning saw BTC fall from an early high of $19,127 to a low of $18,957 before recovering.

Technical Indicators

BTC needs to move through the $19,218 pivot to target the First Major Resistance Level (R1) at $19,437 and the Monday high of $19,527. A BTC return to $19,500 would signal a bullish session. However, FOMC member chatter will need to be less hawkish to support a breakout session.

In the case of an extended rally, BTC should move through the Second Major Resistance Level (R2) at $19,745 to target $20,000. The Third Major Resistance Level (R3) sits at $20,272.

Failure to move through the pivot would likely see BTC test the First Major Support Level (S1) at $18,910. Barring an extended sell-off, BTC should avoid sub-$18,500. The Second Major Support Level (S2) at $18,691 should limit the downside.

The Third Major Support Level (S3) sits at $18,164.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $19,506.

On Monday, the 50-day EMA crossed through the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA. The bearish cross and the 100-day EMA pullback delivered bearish price signals.

Following Monday’s bearish cross, BTC would need to move through R1 ($19,437) and the 50-day EMA ($19,506) to ease selling pressure. However, failure to move through the 50-day EMA ($19,506) would leave sub-$19,000 support levels in play.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.26% to $1,287. A bearish start to the day saw ETH fall from an early high of $1,290 to a low of $1,267 before recovering.

ETH briefly fell through the First Major Support Level (S1) at $1,273.

Technical Indicators

ETH needs to move through the $1,305 pivot to target the First Major Resistance Level (R1) at $1,323 and the Monday high of $1,338. However, investor sentiment would need to improve to support a return to $1,300.

In the event of an extended rally, the Second Major Resistance Level (R2) at $1,355 would likely come into play. The Third Major Resistance Level (R3) sits at $1,405.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,273 in play. Barring an extended US session sell-off, ETH should avoid sub-$1,250. The Second Major Support Level (S2) at $1,255 should limit the downside. However, updates from Ukraine and FOMC member chatter could put ETH under more pressure.

The Third Major Support Level (S3) sits at $1,205.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below 50-day EMA, currently at $1,323. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through R1 ($1,323) and the 50-day EMA ($1,323) would give the bulls a run at the 100-day EMA ($1,342) and R2 ($1,355). However, failure to move through the 50-day EMA ($1,323) would leave the support levels in play.