ETH Eyes Sub-$1,500 as Fed Fear and the SEC Influence Sentiment

Key Insights:

• It was a bullish Saturday session for bitcoin (BTC) and ethereum (ETH), though BTC ended the day at sub-$22,000 for a third session.
• Regulatory risk and Fed Fear limited the upside.
• This morning, ETH and BTC struggled, with crypto market headwinds testing buyer appetite.

Ethereum (ETH) rose by 1.72%. Partially reversing a 2.13% loss from Friday, ETH ended the day at $1,539. ETH ended the session at sub-$1,600 levels for the third consecutive day.

After a range-bound morning, ETH fell to a late afternoon low of $1,505. Steering clear of the First Major Support Level (S1) at $1,484, ETH rose to a late high of $1,544. Coming within range of the First Major Resistance Level (R1) at $1,548, ETH eased back to end the session at $1,539.

On Saturday, bitcoin (BTC) rose by 1.04%. Reversing a 0.73% loss from Saturday, BTC ended the day at $21,865. BTC wrapped up the day at sub-$22,000 for the third consecutive session.

A mixed start to the day saw BTC fall to an early low of $21,614. Steering clear of the First Major Support Level (S1) at $21,448, BTC rose to a final-hour high of $21,907. BTC briefly broke through the First Major Resistance Level (R1) at $21,885 before easing back to end the session at $21,865.

Fed Fear and SEC Regulatory Action Left ETH and BTC on the Back Foot

On Saturday, regulatory risk and Fed Fear continued to test buyer appetite. Despite the bullish session, ETH fell short of $1,550, with BTC failing to retake the $22,000 handle.

While it was a quiet Saturday session, the SEC will likely target other leading US crypto exchanges to end staking services.

Fed Fear remains another headwind for investors to tackle. On Tuesday, the US CPI Report could dictate near-term Fed monetary policy. The January Jobs Report shifted sentiment to a more hawkish outlook, with Fed chatter pointing to a peak interest rate above 5%. Higher for longer would be bearish.

Despite continued progress toward the Ethereum Shanghai hard fork, network updates took a back seat.

On Friday, Ethereum announced the second round of testing of staked ETH withdrawals. The Sepolia testnet follows the Zhejiang testnet and precedes the Goerli testnet and the heavily anticipated Shanghai hard fork. Unlikely the public Zhejiang testnet, the Sepolia testnet will only be available to Ethereum developers on February 28.

The Day Ahead

The NASDAQ mini will likely influence in the final hour, with the Tuesday US CPI Report likely to test the appetite for riskier assets.

Investors should also monitor the crypto news wires for Shanghai hard fork news. SEC chatter and FTX, Genesis, and Silvergate Bank updates will also draw interest.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.50% to $1,531. A mixed morning saw ETH rise to an early high of $1,540 before falling to a low of $1,529.

Technical Indicators

ETH needs to avoid a fall through the $1,529 pivot to target the First Major Resistance Level (R1) at $1,554. A return to $1,550 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 $1,568 and resistance at $1,600. The Third Major Resistance Level (R3) sits at $1,607.

A fall through the pivot would bring the First Major Support Level (S1) at $1,515 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,490. The Second Major Support Level (S2) at $1,490 should limit the downside. The Third Major Support Level (S3) sits at $1,451.

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 $1,546. After a bearish cross on Saturday, the 50-day EMA pulled 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 (1,546) would support a breakout from R1 ($1,554) to give the bulls a run at R2 ($1,568) and the 50-day EMA ($1,589). However, failure to move through the 200-day EMA ($1,546) would leave S1 ($1,515) and sub-$1,500 support levels 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 0.37% to $21,785. A range-bound start to the day saw BTC rise to an early high of $21,889 before falling to a low of $21,770.

Technical Indicators

BTC needs to move through the $21,795 pivot to target the First Major Resistance Level (R1) at $21,977. A move through the Saturday high of $21,907 would signal a breakout session. The crypto news wires 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 $22,088. The Third Major Resistance Level (R3) sits at $22,381.

Failure through the pivot would leave the First Major Support Level (S1) at $21,684 in play. However, barring another risk-off-fueled crypto sell-off, BTC should avoid sub-$21,500. The Second Major Support Level (S2) at $21,502 should limit the downside. The Third Major Support Level (S3) sits at $21,209.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. BTC sat above the 200-day EMA ($21,706). After a bearish cross on Saturday, the 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A hold above the 200-day EMA (21,706) would give the bulls a run at R1 ($21,977) and $22,000. However, a fall through the 200-day EMA ($21,706) and S1 ($21,684) would bring S2 ($21,502) into view. A move through the 50-day EMA ($23,434) would send a bullish signal.