ETH and BTC Decouple from the NASDAQ as FTX Overshadows Fed Pivot Bets

Key Insights:

• Bitcoin (BTC) and ethereum (ETH) saw red on Friday, with BTC revisiting sub-$17,000 before steadying.
• FTX remained the market focal point, with news of FTX.US filing for bankruptcy and early signs of contagion weighing on buyer appetite.
• Things were no better this morning, with uncertainty over an FTX bailout and contagion fear weighing on investor sentiment.

Ethereum (ETH) fell by 0.77% on Friday. Partially reversing a 17.73% rally from Thursday, ETH ended the day at $1,285.

After a mixed morning, ETH rose to an early afternoon high of $1,307. Coming up short of the First Major Resistance Level (R1) at $1,401, ETH fell to an afternoon low of $1,198. However, steering clear of the First Major Support Level (S1) at $1,137, ETH found late support to end the day at $1,285.

On Friday, bitcoin (BTC) fell by 3.06%. Partially reversing a 10.44% rally from Thursday, BTC ended the day at $17,047. Notably, BTC logged the fifth loss from six sessions.

A mixed start to the day saw BTC rise to an early high of $17,671. Coming up short of the First Major Resistance Level (R1) at $18,574, BTC slid to an early afternoon low of $16,355. However, steering clear of the First Major Support Level (S1) at $16,167, BTC found late support to wrap up the day at $17,047.

Price action throughout Friday hinged on FTX updates and contagion fear. News of FTX.US filing for bankruptcy sent BTC, ETH, and the broader crypto market into the red. Early contagion signs added to the market angst, with BlockFi freezing withdrawals.

The crypto market collapse led to a decoupling with the NASDAQ Composite Index, which enjoyed a bullish week on bets of a December Fed pivot.

This morning, investors failed to shake off the bearish mood, with contagion fear weighing on buyer appetite. Progress toward an FTX bailout would improve the mood. On Friday, news of Justin Sun being ready to provide billions to FTX suggests that attempts are ongoing to amass the necessary $9.4 billion to plug the FTX hole.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 1.93% to $1,260. A mixed morning saw ETH rise to an early high of $1,289 before falling to a low of $1,236.

Technical Indicators

ETH needs to move through the $1,263 pivot to target the First Major Resistance Level (R1) at $1,329. An ETH return to $1,300 would signal a bullish afternoon session. However, moves through the afternoon session will depend on FTX and contagion news.

In the event of an extended rally, ETH would likely test the Second Major Resistance Level (R2) at $1,372 and resistance at $1,400. The Third Major Resistance Level (R3) sits at $1,481.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,220 in play. However, barring another extended afternoon sell-off, ETH should avoid sub-$1,150. The Second Major Support Level (S2) at $1,154 should limit the downside.

The Third Major Support Level sits at $1,045.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 50-day EMA, currently at $1,376. The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA crossing through the 200-day EMA, delivering bearish signals.

A move through R1 ($1,329) would bring R2 ($1,372) and the 50-day EMA ($1,376) into play. However, failure to move through R1 ($1,329) would leave S1 ($1,220) in view.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 1.18% to $16,845. A mixed morning saw BTC rise to an early high of $17,106 before falling to a low of $16,635.

Technical Indicators

BTC needs to move through the $17,024 pivot to target the First Major Resistance Level (R1) at $17,694. A move through the Friday high of $17,500 would signal a bullish session. However, the direction will hinge on updates on FTX and contagion news.

In the case of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $18,340 and resistance at $19,000.

The Third Major Resistance Level (R3) sits at $19,656.

Failure to move through the pivot would leave the First Major Support Level (S1) at $16,378 in play. Barring another extended sell-off, BTC should avoid sub-$15,500. The Second Major Support Level (S2) at $15,708 should limit the downside. However, negative FTX-related news could send BTC to sub-$15,000.

The Third Major Support Level (S3) sits at $14,392.

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 $18,535. The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A BTC move through R1 ($17,694) would give the bulls a run at R2 ($18,340) and the 50-day EMA ($18,535). However, failure to move through R1 and the 50-day EMA would leave BTC under pressure and bring S1 ($16,378) into view.