ETH Eyes Sub-$1,450 as Focus Shifts from Shanghai Hard Fork Progress

Key Insights:

• It was a bearish Monday session for bitcoin (BTC) and ethereum (ETH), with BTC falling short of $22,000.
• While Fed Fear subsided, news of the SEC planning to sue Paxos over the Binance USD (BUSD) sent the crypto market into the red.
• This morning, ETH and BTC struggled as investors looked toward the US CPI Report amidst increased regulatory uncertainty.

Ethereum (ETH) slipped by 0.59% on Monday. Following a 1.56% fall on Sunday, ETH ended the day at $1,506. ETH revisited sub-$1,500 for the third time in four sessions.

A mixed start to the day saw ETH rise to a mid-morning high of $1,527. Coming up short of the First Major Resistance Level (R1) at $1,544, ETH slid to a late afternoon low of $1,462. ETH briefly fell through the First Major Support Level (S1) at $1,490 to test the Second Major Support Level (S2) at $1,465 before a partial recovery to end the day at $1,506.

On Monday, bitcoin (BTC) fell by 0.11%. Following a 0.32% decline on Sunday, BTC ended the day at $21,773. BTC wrapped up the day at sub-$22,000 for the fifth consecutive session.

After a choppy start to the day, BTC rose to a mid-morning high of $21,905. Coming up short of the First Major Resistance Level (R1) at $22,039, BTC slid to a late afternoon low of $21,354. BTC briefly fell through the First Major Support Level (S1) at $21,609 and the Second Major Support Level (S2) at $21,423 before ending the day at $21,773.

ETH Sits in the Hands of the SEC as Staking and BUSD Come Under Fire

On Monday, there were no Shanghai hard fork news updates for investors to consider. The lack of news left ETH in the hands of the broader crypto market. Last Friday, Ethereum developers announced the second round of testing of staked ETH withdrawals with the release of the Sepolia testnet.

By way of background, the Sepolia testnet follows the Zhejiang testnet and precedes the Goerli testnet and the heavily anticipated Shanghai hard fork in March. However, unlike the Zhejiang testnet, the Sepolia testnet is only available to developers.

With no developer updates, news of the SEC planning to sue Paxos over Binance USD (BUSD) gripped the crypto market. Last week, Kraken swiftly settled with the SEC, paying a fine of $30 million and shutting down its staking services offering to US retail customers.

As the SEC looks to take a stronger foothold, more SEC regulation by enforcement is likely, which will continue to test investor sentiment.

Today, investors need to continue monitoring the crypto news wires. While Shanghai hard fork updates will draw interest, SEC activity, US economic indicators, and Fed reaction to the US CPI Report will have more influence.

A pickup in US inflationary pressure and hawkish Fed chatter would be bearish. FOMC members Logan, Harker, and Williams will speak after the US CPI Report release.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.30% to $1,502. A mixed morning saw ETH rise to an early high of $1,510 before falling to a low of $1,495.

Technical Indicators

ETH needs to avoid a fall through the $1,498 pivot to target the First Major Resistance Level (R1) at $1,535. A move through the Monday high of $1,527 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 $1,563 and resistance at $1,600. The Third Major Resistance Level (R3) sits at $1,628.

A fall through the pivot would bring the First Major Support Level (S1) at $1,470 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,450 and the Second Major Support Level (S2) at $1,433. The Third Major Support Level (S3) sits at $1,368.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 200-day EMA, currently at $1,541. After a bearish cross on Saturday, the 50-day EMA pulled further back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through R1 ($1,535) and the 200-day EMA (1,541) would give the bulls a run at the 50-day EMA ($1,556) and R2 ($1,563). However, failure to move through the 200-day EMA ($1,541) would leave S1 ($1,470) in view. A move through the 50-day EMA would send a bullish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.30% to $21,707. A mixed start to the day saw BTC rise to an early high of $21,805 before falling to a low of $21,674.

Technical Indicators

BTC needs to avoid a fall through the $21,677 pivot to target the First Major Resistance Level (R1) at $22,001. A return to $22,000 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 $22,228. The Third Major Resistance Level (R3) sits at $22,779.

A fall through the pivot would bring the First Major Support Level (S1) at $21,450 into play. However, barring another risk-off-fueled crypto sell-off, BTC should avoid sub-$21,000. The Second Major Support Level (S2) at $21,126 should limit the downside. The Third Major Support Level (S3) sits at $20,575.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat below the 200-day EMA ($21,714). After a bearish cross on Saturday, the 50-day EMA pulled further back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through the 200-day EMA (21,714) would support a breakout from R1 ($22,001) to target the 50-day EMA ($22,163) and R2 ($22,323). However, failure to move through the 200-day EMA ($21,714) would bring S1 ($21,450) and sub-$21,000 into view. A move through the 50-day EMA would send a bullish signal.