ETH Bulls to Target First Return to $1,800 Since August

Key Insights:

• It was a bullish Wednesday session for bitcoin (BTC) and ethereum (ETH), with BTC retaking the $24,000 handle.
• Easing crypto regulatory risk and US lawmaker support delivered a breakout session.
• Bullish sentiment continued this morning, with BTC and ETH making further gains.

Ethereum (ETH) rallied by 7.58% on Wednesday. Following a 3.39% gain on Tuesday, ETH ended the day at $1,675. ETH avoided sub-$1,500 for the first time in four sessions.

A mixed start to the day saw ETH fall to an early low of $1,541. Steering clear of the First Major Support Level (S1) at $1,508, ETH rallied to a late high of $1,683. ETH broke through the First Major Resistance Level (R1) at $1,587 and the Second Major Resistance Level (R2) at $1,618 to end the day at $1,675.

On Wednesday, bitcoin (BTC) surged by 9.95%. Following a 1.95% gain on Tuesday, BTC ended the day at $24,318. BTC wrapped up the day at $24,000 for the first time since August.

A bearish start to the day saw BTC fall to an early morning low of $22,082 before making a move. Steering clear of the First Major Support Level (S1) at $21,722, BTC surged to a final-hour high of $24,393. BTC broke through the Major Resistance Levels to end the day at $24,318.

ETH and BTC to Remain in the Hands of the SEC and US Lawmakers

On Wednesday, it was radio silence from developers testing the Sepolia testnet. The lack of updates left ETH in the hands of the SEC, US lawmakers, and US economic indicators.

US retail sales figures for January impressed, surging by 3.0%. After falling for two consecutive months, the January increase eased fears of a Fed-fueled economic recession. The NASDAQ Index and the S&P 500 ended the day with gains of 0.92% and 0.28%, respectively.

However, the crypto news wires delivered the mid-week breakout session.

Following the SEC moves against Kraken and Paxos and the Binance USD (BUSD) stablecoin, US lawmakers continued showing support for the crypto market.

Former speaker of the House of Representatives Nancy Pelosi tweeted,

“Sen. Tuberfille (R) plans to reintroduce the “Financial Freedoms Act.”

Adding,

“It aims to stop the Dep of Labor from restricting individuals from investing their 401ks into crypto. Every American should have the right to invest their retirement money how they see fit.”

Wednesday’s news followed lawmaker scrutiny of the SEC on Tuesday, which may have forced the SEC to take a more measured approach toward the digital asset space.

From an investor perspective, the fact that not all US lawmakers are anti-crypto was positive.

With the SEC under the watchful eye of lawmakers, there was a shift in approach on Wednesday, which was also crypto-friendly.

The SEC proposed amendments to their custody rules to incorporate cryptocurrencies on Wednesday. In addition to custody rules, the changes would also include amendments relating to reporting obligations, bookkeeping, and the registration of investment advisers.

For the Day Ahead

Today, investors need to continue monitoring the crypto news wires. While Shanghai hard fork updates will provide direction, SEC activity, US economic indicators, and Fed reaction to the latest round of US economic indicators will influence. Today, US jobless claims, wholesale inflation, and Philly Fed Manufacturing PMI numbers will be in the spotlight.

Lawmaker chatter will also need consideration following the Tuesday Committee hearing that targeted the SEC Chair.

Easing regulatory risk should return investor focus to the Shanghai hard fork that remains on schedule for March.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.72% to $1,687. A mixed morning saw ETH fall to an early low of $1,672 before rising to a high of $1,713.

Technical Indicators

ETH needs to avoid a fall through the $1,633 pivot to target the First Major Resistance Level (R1) at $1,725. A move through the morning high of $1,713 would signal a breakout session. However, Shanghai hard fork updates 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 $1,775 and resistance at $1,800. The Third Major Resistance Level (R3) sits at $1,917.

A fall through the pivot would bring the First Major Support Level (S1) at $1,583 into play. However, barring a broad-based crypto market sell-off, ETH should avoid sub-$1,500 and the Second Major Support Level (S2) at $1,491. The Third Major Support Level (S3) sits at $1,349.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above the 100-day EMA, currently at $1,581. The 50-day EMA converged on the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A bearish cross of the 50-day EMA through the 100-day EMA would support a breakout from R1 ($1,725) to target R2 ($1,775) and $1,800. However, a fall through S1 ($1,583) and the 100-day ($1,581) and 50-day ($1,578) EMAs would give the bears a run at the 200-day EMA ($1,549). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 1.27% to $24,628. A bullish start to the day saw BTC rise from an early low of $24,277 to a high of $24,867.

Technical Indicators

BTC needs to avoid a fall through the $23,598 pivot to target the First Major Resistance Level (R1) at $25,113. A move through the morning high of $24,867 would signal a breakout session. The crypto news wires and US stats need to 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 $25,908 and resistance at $27,000. The Third Major Resistance Level (R3) sits at $28,220.

A fall through the pivot would bring the First Major Support Level (S1) at $22,802 into play. However, barring another risk-off-fueled crypto sell-off, BTC should avoid sub-$22,000 and the Second Major Support Level (S2) at $21,287.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. BTC sat above the 50-day EMA ($22,586). The 50-day EMA crossed through the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

The bullish cross of the 50-day EMA through the 100-day EMA supports a breakout from R1 ($25,113) to target R2 ($25,909) and $27,000. However, a fall through S1 ($22,802) would bring the 50-day ($22,586) and 100-day ($22,511) EMAs into view. A fall through the 50-day EMA would send a bearish signal.