ETH Eyes a Return to $1,610 as Investors Await Shanghai Hard Fork News

Key Insights:

• It was a bearish Saturday session for bitcoin (BTC) and ethereum (ETH), while BTC closed out the day at $23,029.
• Increased crypto market scrutiny and Shanghai Hard Fork chatter left the pair in negative territory.
• However, ETH and BTC enjoyed a bullish start to the Sunday session.

Ethereum (ETH) fell by 1.63% on Saturday. Following a 0.19% decline on Friday, ETH ended the day at $1,572. ETH wrapped up the day at sub-$1,600 for the second consecutive session.

A bullish start to the day saw ETH rise to an early morning high of $1,607. Coming up short of the First Major Resistance Level (R1) at $1,630, ETH slid to a late low of $1,556. Finding support at the First Major Support Level (S1) at $1,558, ETH revisited $1,575 before easing back.

On Saturday, bitcoin (BTC) fell by 0.16%. Partially reversing a 0.27% gain from Friday, BTC ended the day at $23,029. BTC wrapped up the day at $23,000 for the fourth consecutive session.

A bullish start to the day saw BTC rise to an early high of $23,181. Coming up short of the First Major Resistance Level (R1) at $23,524, BTC slid to an early afternoon low of $22,876. However, steering clear of the First Major Support Level (S1) at $22,571, BTC returned to $23,000 to limit the loss on the day.

Crypto Market Scrutiny and Shanghai Hard Fork Chatter Tests Buyers

There were no external market forces to provide direction on Saturday. However, increased crypto market scrutiny tested buyer appetite.

The Friday release of the Administration’s Roadmap to Mitigate Cryptocurrencies’ Risks continued testing buyer appetite on Saturday. Notably, the roadmap stated,

“We encourage regulators to continue these efforts, including those designed to address and limit financial institutions’ exposure to the risks of digital assets.”

For investors, the timing of the release was no coincidence. On Thursday, the markets gained access to a 116-page list of FTX creditors, which included Goldman Sachs (GS) and other big names. Measures to curb access to the crypto market could materially weigh on BTC, ETH, and the broader crypto market.

Developer sentiment toward the planned Shanghai hard fork also weighed. Following the success of the Merge, some developers raised concerns about a technical debt build-up from moving too quickly.

While the number of developers voicing concerns was small, the comments emphasized the importance of developers getting it right, increasing the risk of a delay.

Today, investors should monitor the crypto news wires for updates on FTX and Genesis, with Shanghai hard fork chatter also needing consideration. Easing contagion risk and bets of a less aggressive Fed interest rate trajectory to bring inflation to target remain tailwinds.

In the final hour, the NASDAQ mini will also influence as investors turn their attention to Wednesday’s Fed interest rate decision.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 1.45% to $1,595. A mixed start to the day saw ETH fall to an early low of $1,567 before rising to a high of $1,619.

ETH briefly broke through the First Major Resistance Level (R1) at $1,601 before easing back.

Technical Indicators

ETH needs to avoid a fall through the $1,578 pivot to retarget the First Major Resistance Level (R1) at $1,601 and the morning high of $1,619. A return to $1,610 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 $1,629 and resistance at $1,650. The Third Major Resistance Level (R3) sits at $1,680.

A fall through the pivot would bring the First Major Support Level (S1) at $1,550 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 $1,527. The Third Major Support Level (S3) sits at $1,476.

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 $1,586. 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 ($1,586) would support a breakout from R1 ($1,601) to target R2 ($1,629) and $1,650. However, a fall through the 50-day EMA ($1,586) would give the bears a run at S1 ($1,550) and the 100-day EMA ($1,544). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.66% to $23,182. A bullish start to the day saw BTC rally to an early high of $23,523 before easing back. BTC broke through the First Major Resistance Level (R1) at $23,181 and briefly through the Second Major Resistance Level (R2) at $23,334.

Technical Indicators

BTC needs to avoid a fall through the $23,029 pivot to support another breakout from the First Major Resistance Level (R1) at $23,181 to retarget the Second Major Resistance Level (R2) at $23,334 and the early high of $23,523.

A return to the morning high of $23,523 would support an extended rally. However, the crypto news wires should be market-friendly to deliver a breakout.

In the event of an extended rally, BTC would likely test the Third Major Resistance Level (R3) at $23,639 and resistance at $24,000.

A fall through the pivot would bring the First Major Support Level (S1) at $22,876 into play. However, barring a broad-based crypto sell-off, BTC should avoid sub-$22,500. The Second Major Support Level (S2) at $22,724 should limit the downside. The Third Major Support Level (S3) sits at $22,419.

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 $22,626. 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 the Major Support Levels and the 50-day EMA ($22,626) would support a breakout from R1 ($23,181) to retarget R2 ($23,334) and the morning high of $23,523. However, a fall through S1 ($22,876) would give the bears a run at S2 ($22,724) and the 50-day EMA ($22,626). A fall through the 50-day EMA would send a bearish signal.