ETH Retargets $1,700 with Weak US Labor Market Stats Crypto Positive

Key Insights:

• Bitcoin (BTC) and Ethereum (ETH) are in positive territory, with US nonfarm payroll and wage growth figures delivering support.
• Investors hope today’s US economic indicators will allow the Fed to take the foot off the gas. Uncertainty remains, however.
• Crypto network news remains ETH positive, with BTC support at $20,000 key in recent sessions.

On Thursday, bitcoin (BTC) rose by 0.43%. Following a 1.18% gain from Wednesday, BTC ended the day at $20,144.

Better-than-expected US economic indicators weighed on riskier assets before a broad-based crypto rebound. BTC fell to sub-$20,000 for a sixth consecutive session before wrapping up the day at $20,144.

Following a 1.90% gain on Wednesday, Ethereum (ETH) rose by 2.06% on Thursday to end the day at $1,586.

Tracking the broader market, ETH fell to a low of $1,513 before striking a high of $1,600. US economic indicators led ETH to the day low before a late rebound. Investor sentiment towards the Merge supported the run at $1,600.

Following better-than-expected US economic indicators on Thursday, riskier assets found relief early in today’s US session. US labor market figures disappointed, giving the markets hope of a less aggressive interest rate path to normalization.

In August, nonfarm payrolls increased by 315k versus a downwardly revised 526k surge in July. Economists forecasted a 300k rise. Despite the increase in hiring, the unemployment rate increased from 3.5% to 3.7% as the participation rate climbed from 62.1% to 62.4%.

While nonfarm payrolls beat expectations, wage growth disappointed. In August, average hourly earnings increased by 0.3% versus a forecasted 0.4% rise. Average hourly earnings increased by 0.5% in July. Year-over-year, wages were up 5.2%. Economists forecast a 5.3% increase.

Crypto market reaction to the labor market numbers was evident, with the total crypto market cap rising to a day high of $978.7bn.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 1.30% to $20,405. A mixed morning saw BTC fall to an early low of $19,952 before rising to a high of $20,409.

BTC broke through the First Major Resistance Level (R1) at $20,377.

Technical Indicators

A BTC hold above R1 and the $19,979 pivot would support another run at the Second Major Resistance Level (R2) at $20,610. BTC needs broader market support to break out from $20,500.

An extended crypto rally would see BTC test resistance at $21,000 before easing back. The Third Major Resistance Level (R3) sits at $21,241.

A fall through R1 and the pivot would bring the First Major Support Level (S1) at $19,746 into play. Barring an extended sell-off, BTC should avoid sub-$19,500 and the Second Major Support Level at $19,348.

The Third Major Support Level (S3) sits at $18,717. While labor market numbers provided support, expect hawkish FOMC member chatter to send BTC back to sub-$20,000.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $20,418.

The 100-day EMA pulled back from the 200-day EMA, with the 50-day EMA falling back from the 200-day EMA, delivering bearish price signals.

A further pullback of the 50-day EMA from the 200-day EMA would bring the Major Support levels into play.

For the bulls, a BTC move through the 50-day EMA ($20,418) would bring R2 ($20,610) and the 100-day EMA ($21,048) into view. The 200-day EMA sits at $21,728.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 3.32% to $1,639. A mixed start to the day saw ETH fall to an early low of $1,567 before rising to a high of $1,649. ETH broke through the First Major Resistance Level (R1) at $1,620.

Technical Indicators

ETH will need to hold above R1 and the $1,566 pivot to retarget the Second Major Resistance Level (R2) at $1,653.

However, FOMC member chatter has to be crypto-market friendly to support a hold above R1. In the case of an extended rally, ETH will likely test resistance at $1,700.

The Third Major Resistance Level (R3) sits at $1,740.

A fall through R1 and the pivot would bring the First Major Support Level (S1) at $1,533 into play. However, barring another sell-off, ETH should avoid sub-$1,500 and the Second Major Support Level (S2) at $1,479.

The Third Major Support Level (S3) sits at $1,392.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above the 200-day EMA, currently at $1,628.

The 50-day EMA narrowed on the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA to deliver bullish signals.

An ETH hold above the 200-day EMA ($1,628) and R1 ($1,620) would give the bulls another run at R2 ($1,653) and $1,700.

However, a fall through the 200-day EMA and R1 would bring the 100-day EMA ($1,615), the 50-day EMA ($1,578), and support levels into play.