ETH Bulls in the Need of Shanghai Hard Fork Updates for $1,700

Key Insights:

• It was a bullish Sunday session for bitcoin (BTC) and ethereum (ETH), with BTC striking a new 2023 high of $23,962.
• Investor sentiment toward Fed monetary policy and hopes of a soft landing supported a recovery of Saturday’s losses.
• However, ETH and BTC struggled through the Monday morning session.

Ethereum (ETH) rose by 4.64% on Sunday. Reversing a 1.63% loss from Saturday, ETH ended the week up 1.04% to $1,645. Despite the bullish session, ETH revisited sub-$1,600 for the seventh consecutive session.

A mixed start to the day saw ETH fall to an early morning low of $1,567. Steering clear of the First Major Support Level (S1) at $1,550, ETH rallied to a late high of $1,661. ETH broke through the First Major Resistance Level (R1) at $1,601 and the Second Major Resistance Level (R2) at $1,629 to end the day at $1,645.

On Sunday, bitcoin (BTC) rallied by 3.11%. Reversing a 0.16% loss from Saturday, BTC ended the week up by 4.55% to $23,746. BTC struck a new 2023 high of $23,962 while avoiding sub-$23,000 for the first time since August 19.

A mixed start to the day saw BTC fall to an early low of $23,000 before making a move. Steering clear of the First Major Support Level (S1) at $22,876, BTC rallied to a late high of $23,962. BTC broke through the Major Resistance Levels to wrap up the day at $23,746. The Third Major Resistance Level (R3) at $23,639 delivered late support.

Fed Policy Sentiment and Easing FTX Contagion delivered Support

There were no external market forces to provide BTC, ETH, and the broader market with direction on Sunday. However, the market bets of a 25-basis point Fed interest rate hike on Wednesday and a less aggressive interest rate path to bring inflation to target delivered price support.

A less aggressive interest rate trajectory would also ease the chances of a hard landing, another positive for riskier assets.

For the crypto market, easing FTX contagion risk remains the key driver near-term. However, the latest White House communication delivered yet more regulatory uncertainty for crypto investors to navigate. The call for law makers and regulators to step up regulatory oversight could see the SEC ramp up its regulation by enforcement mantra without the crypto market benefitting from a clear regulatory blueprint.

Today, investors should monitor the crypto news wires for updates on FTX and Genesis, with Shanghai hard fork chatter also needing consideration. Investors need to look out for any suggestions of a delay to the planned March hard fork timeline.

In the afternoon session, the NASDAQ Index will likely influence ahead of the Wednesday interest rate decision.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.56% to $1,636. A mixed start to the day saw ETH rise to an early high of $1,648 before falling to a low of $1,632.

Technical Indicators

ETH needs to avoid a fall through the $1,624 pivot to target the First Major Resistance Level (R1) at $1,682. A return to $1,650 would signal a breakout session. However, the crypto news wires will have to be crypto-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,718. The Third Major Resistance Level (R3) sits at $1,812.

A fall through the pivot would bring the First Major Support Level (S1) at $1,588 into play. However, barring a broad-based crypto market sell-off, ETH should avoid sub-$1,550 and the Second Major Support Level (S2) at $1,530. The Third Major Support Level (S3) sits at $1,436.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above the 50-day EMA, currently at $1,596. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($1,596) would support a breakout from R1 ($1,682) to target R2 ($1,718). However, a fall through the 50-day EMA ($1,596) and S1 ($1,588) would give the bears a run at the 100-day EMA ($1,554) and S2 ($1,530). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.10% to $23,723. A mixed start to the day saw BTC rise to an early high of $23,785 before falling to a low of $23,569.

Technical Indicators

BTC needs to avoid a fall through the $23,569 pivot to target the First Major Resistance Level (R1) at $24,139. A move through the Sunday high of $23,962 would signal another breakout session. However, the crypto news wires and the NASDAQ Index need to provide support.

In the event of another bullish session, the bulls would likely test the Second Major Resistance Level (R2) at $24,531. The Third Major Resistance Level sits at $25,493.

A fall through the pivot would bring the First Major Support Level (S1) at $23,177 into play. However, barring a broad-based crypto sell-off, BTC should avoid sub-$23,000 and the Second Major Support Level (S2) at $22,607. The Third Major Support Level (S3) sits at $21,645.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA, currently at $22,851. The 50-day EMA pulled further away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($23,177) and the 50-day EMA ($22,851) would support a breakout from R1 ($24,139) to target R2 ($24,531). However, a fall through S1 ($23,177) would give the bears a run at the 50-day EMA ($22,851) and S2 ($22,607). A fall through the 50-day EMA would send a bearish signal.