ETH and BTC Reverse Tuesday Losses, with ETH Retargeting $1,700

Key Insights:

• Bitcoin (BTC) and Ethereum (ETH) are in positive territory, with the pair reversing Tuesday’s US stat-fueled sell-off.
• Crypto investors are looking to break free from the grip of the Fed and the NASDAQ 100 after an initial decoupling on Monday.
• Crypto network news remains ETH positive, with BTC support at $20,000 key in recent sessions.

On Tuesday, bitcoin (BTC) fell by 2.38%, partially reversing a 3.76% gain from the previous session. US economic indicators sent BTC to a low of $19,574 before wrapping up the day at $19,824.

Ethereum (ETH) fell by a modest 1.74% to end the day at $1,552. On Monday, ETH returned to $1,500 with an 8.76% rally driven by market sentiment towards the Merge.

Ahead of today’s US ADP nonfarm employment change figures, the total crypto market cap was up $25 billion to $970.7 billion. By contrast to Tuesday’s positive economic indicators, US employment figures delivered crypto support ahead of the US opening bell.

In June, the ADP reported a 132k increase in employment versus a forecasted 288k. According to the ADP, employment increased by 128k in May. The crypto market responded favorably to the weak number. However, while the numbers were crypto-friendly, the global financial markets will likely hold out for Friday’s NFP and wage growth figures that will influence the Fed.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 2.20% to $20,261. A mixed morning saw BTC fall to an early low of $19,812 before rising to a high of $20,495.

BTC broke through the First Major Resistance Level (R1) at $20,417 before easing back.

Technical Indicators

A BTC hold above the $19,996 pivot would support another run at the First Major Resistance Level (R1) at $20,417. BTC needs broader market support to return to $20,400.

An extended crypto rally would see BTC test the Second Major Resistance Level (R2) at $21,011 and resistance at $21,500. The Third Major Resistance Level (R3) sits at $22,026.

A fall through the pivot would bring the First Major Support Level (S1) at $19,402 into play. Barring an extended sell-off, BTC should steer clear of sub-$19,000 and the Second Major Support Level at $18,981.

The Third Major Support Level (S3) sits at $17,966. Hawkish FOMC member chatter would test support at $19,000.

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 $20,630. The 100-day EMA pulled back from the 200-day EMA, with the 50-day EMA easing back from the 200-day EMA, delivering bearish price signals.

For the bulls, a BTC move through R1 ($20,417) would bring the 50-day EMA ($20,630) and R2 ($21,011) into view.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 3.92% to $1,585. A mixed start to the day saw ETH fall to an early low of $1,524 before rising to a high of $1,620. ETH broke through the First Major Resistance Level (R1) at $1,596 before easing back.

Technical Indicators

ETH will need to hold above the $1,535 pivot to retarget the First Major Resistance Level (R1) at $1,596 and the morning high of $1,620.

However, FOMC member chatter will need to be crypto-market friendly to support a return to $1,600. In the case of an extended rally, ETH will likely test the Second Major Resistance Level (R2) at $1,667 and resistance at $1,700.

The Third Major Resistance Level (R3) sits at $1,799.

A fall through the pivot would bring the First Major Support Level (S1) at $1,464 into play. However, barring another sell-off, ETH should avoid sub-$1,450 and the Second Major Support Level (S2) at $1,403.

The Third Major Support Level (S3) sits at $1,271.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 100-day EMA, currently at $1,626.

The 50-day EMA narrowed on the 100-day EMA, while the100-day EMA eased back from the 200-day EMA to deliver mixed signals.

An ETH move through R1 ($1,596) would give the bulls a run at the 100-day EMA ($1,626) and the 200-day EMA ($1,635). A breakout from the 200-day EMA would bring R2 ($1,667) and $1,700 into play and signal a possible near-term bearish trend reversal.

However, a fall through the 50-day EMA would bring support levels into play.