ETH Bulls Eye $1,650 on Justin Sun’s Bullish Stake on Shanghai Upgrade

Key Insights:

• It was a bearish Saturday session for bitcoin (BTC) and ethereum (ETH), with ETH revisiting sub-$1,600.
• Fed Fear and regulatory risk jitters weighed on investor sentiment, with anti-crypto chatter from the G20 also testing buyer appetite.
• However, ETH and BTC made modest gains this morning.

Ethereum (ETH) fell by 0.81% on Saturday. Following a 2.60% loss on Friday, ETH ended the day at $1,595. The bearish session led ETH to sub-$1,600 for the third time in ten sessions.

A mixed start to the day saw ETH rise to an early high of $1,609. Coming up short of the First Major Resistance Level (R1) at $1,657, ETH fell to a late low of $1,558. ETH briefly fell through the First Major Support Level (S1) at $1,567 before ending the day at $1,595.

On Saturday, bitcoin (BTC) slipped by 0.09%. Following a 3.13% slide on Friday, BTC ended the day at $23,178. The bearish session sent BTC to sub-$23,000 for the second time in ten sessions. BTC extended its losing streak to five sessions, the second of the year.

A mixed start to the day saw BTC rise to an early morning high of $23,223. Coming up short of the First Major Resistance Level (R1) at $23,942, BTC slid to a late low of $22,810. However, steering clear of the First Major Support Level (S1) at $22,665, BTC found late support to end the day at $23,178.

Shanghai Upgrade Plays Second Fiddle to the Fed and the G20

It is a busy time for the Ethereum community, with the Shanghai upgrade set to occur on February 28. While market sentiment toward the impact of the Shanghai upgrade on ETH is mixed, Tron (TRX) founder Justin Sun has taken a bullish position, staking 150,100 ETH on Lido (LDO).

Data from Cryptoquant showed a spike in ETH staking inflows on Saturday. The chart below shows the 150,100 ETH inflow that formed part of 198,560 ETH staking inflows on February 25.

Lookonchain identified the 150,100 ETH stake by way of four separate transactions.

The market expects the Shapella upgrade to occur at 04:04:47 UTC, after which validators can withdraw their staked ETH on the Beacon Chain.

While news of the Justin Sun stake was ETH positive, G20 updates and Fed Fear weighed on investor appetite.

On Saturday, leaders attending the G20 called for coordination to deliver a global regulatory framework to address cryptocurrency-related risks. The IMF maintained its anti-crypto position, with IMF Managing Director Kristalina Georgieva suggesting that banning crypto should be an option.

While former Fed Chair and US Treasury Secretary Janet Yellen poured cold water on the notion of a ban, the increased scrutiny weighed on the broader crypto market. Yellen favored a comprehensive regulatory framework, saying,

“We haven’t suggested outright banning of crypto activities, but it is critical to put in place a strong regulatory framework. We’re working with other governments.”

Fed Fear added to the bearish mood following the US inflation numbers and hawkish Fed chatter on Friday.

The Day Ahead

Investors should continue to monitor Shanghai upgrade news. With three days remaining, reports of a delay would be bearish.

However, a lack of news would leave US regulatory activity and US lawmaker chatter in focus. Investors should also track the crypto news wires for Binance, FTX, and SEC v Ripple news updates that could move the dial.

In the final hour, the NASDAQ mini will also provide direction as investors assess the lasting impact of the US inflation numbers on the Fed and the global financial markets.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.36% to $1,600. A mixed start to the day saw ETH fall to an early low of $1,588 before rising to a high of $1,601.

Technical Indicators

ETH needs to avoid the $1,587 pivot to target the First Major Resistance Level (R1) at $1,617. A move through the Saturday high of $1,609 would signal a breakout session. However, Shanghai upgrade news and the crypto news wires should be ETH-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,638 and resistance at $1,650. The Third Major Resistance Level (R3) sits at $1,689.

A fall through the pivot would bring the First Major Support Level (S1) at $1,566 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,500. The Second Major Support Level (S2) at $1,536 should limit the damage. The Third Major Support Level (S3) sits at $1,485.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat at the 200-day EMA, currently at $1,597. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through R1 ($1,617) would support a breakout from the 100-day ($1,630) and 50-day ($1,636) EMAs to target R2 ($1,638). However, a fall through the 200-day EMA ($1,597) would give the bears a run at S1 ($1,566). A breakout from the 50-day EMA would send a bullish signal.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.04% to $23,188. A mixed start to the day saw BTC fall to an early low of $23,083 before rising to a high of $23,188.

Technical Indicators

BTC needs to avoid the $23,070 pivot to target the First Major Resistance Level (R1) at $23,331. A move through the Saturday high of $23,223 would signal a breakout session. The crypto news wires should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $23,483 and resistance at $23,500. The Third Major Resistance Level (R3) sits at $23,896.

A fall through the pivot would bring the First Major Support Level (S1) at $22,918 into play. However, barring another Fed-fueled crypto sell-off, BTC should avoid sub-$22,500. The Second Major Support Level (S2) at $22,657 should limit the downside.

The Third Major Support Level (S3) sits at $22,244.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat below the 100-day EMA ($23,547). The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through R1 ($23,331) would give the bull a run at R2 ($23,483) and the 100-day ($23,547) and 50-day ($23,739) EMAs. However, a fall through S1 ($22,918) and the 200-day EMA ($22,854) would give the bears a run at S2 ($22,657). A move through the 50-day EMA ($23,736) would send a bullish signal.