ETH Return to $1,700 Hinged on US Stats and Shadow Hard Fork News

Key Insights:

• It was a bullish Wednesday for bitcoin (BTC) and ethereum (ETH), with BTC wrapping up the day at $23,000 for the first time since August.
• Easing contagion risk and bets of a Fed pivot supported a broad-based crypto rebound.
• However, it was a slow start to the Thursday session, with US GDP and Jobless Claims in focus this afternoon.

Ethereum (ETH) rose by 3.66% on Wednesday. Partially reversing a 4.36% slide from Tuesday, ETH ended the day at $1,613. ETH wrapped up the day a $1,600 for the fifth time in six sessions.

A bearish start to the day saw ETH fall to an early low of $1,514. Steering clear of the First Major Support Level (S1) at $1,509, ETH rallied to a late high of $1,641. ETH broke through the First Major Resistance Level (R1) at $1,622 before easing back to end the session at $1,613.

On Wednesday, bitcoin (BTC) rose by 1.89%. Reversing a 1.24% decline from Tuesday, BTC ended the day at $23,054. Notably, BTC held onto the $23,000 handle for the first time since August 18.

A bearish start to the day saw BTC fall to an early low of $22,324. Finding support at the First Major Support Level (S1) at $22,325, BTC rallied to a late high of $23,812. BTC broke through the First Major Resistance Level (R1) at $23,042 and briefly through the Second Major Resistance Level (R2) at $23,456 before easing back to end the day at $23,054.

BTC and ETH Decouple from the NASDAQ Index on Easing Contagion Risk

There were no US economic indicators to guide investors on Wednesday. The lack of stats left the broader crypto market to consider US corporate earnings and Fed monetary policy.

Gloomy outlooks paved the way for a Fed pivot, easing the threat of a hard landing. While supporting the appetite for cryptos, the NASDAQ Index slipped by 0.18%.

Mid-week, crypto investor sentiment continued to improve on easing FTX and Genesis contagion risk, supporting the recovery of Tuesday’s losses.

However, US economic indicators will likely provide direction this afternoon. Jobless claims and Q4 GDP numbers will be in focus. A sharp rise in jobless claims could weigh on the NASDAQ Index and test buyer appetite for cryptos. This morning, the NASDAQ mini was up 54.25 points, providing broader crypto market support.

Investors should also monitor the crypto news wires for updates on FTX and Genesis bankruptcy proceedings and other events that could move the dial.

Updates on the Ethereum Shanghai hard fork will draw plenty of interest. This week, testing began on the shadow Shanghai hard fork, with the community expecting the hard fork to take place in March. Reports of glitches and any suggestions of a delay to the March hard fork would test buyer appetite for ETH.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.10% to $1,611. A mixed start to the day saw ETH rise to an early high of $1,634 before falling to a low of $1,595.

Technical Indicators

ETH needs to avoid a fall through the $1,589 pivot to target the First Major Resistance Level (R1) at $1,665. A move through the Wednesday high of $1,641 would signal a breakout session. However, the crypto news wires and US stats 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 $1,716. The Third Major Resistance Level (R3) sits at $1,843.

A fall through the pivot would bring the First Major Support Level (S1) at $1,538 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 $1,462. The Third Major Support Level (S3) sits at $1,335.

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 $1,583. The 50-day EMA pulled 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 ($1,583) would support a breakout from R1 ($1,665) to target R2 ($1,716). However, a fall through the 50-day EMA ($1,583) would give the bears a run at S1 ($1,538) and the 100-day EMA ($1,524). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.03% to $23,061. A mixed start to the day saw BTC rise to an early high of $23,273 before falling to a low of $22,920.

Technical Indicators

BTC needs to move through the $23,063 pivot to target the First Major Resistance Level (R1) at $23,803 and the Wednesday high of $23,812. A return to $23,500 would support a bullish session. However, the crypto news wires and US economic indicators should be market-friendly to deliver a breakout.

In the event of another extended rally, BTC would likely test the Second Major Resistance Level (R2) at $24,551 and resistance at $25,000. The Third Major Resistance Level (R3) sits at $26,039.

Failure to move through the pivot would leave the First Major Support Level (S1) at $22,315 in play. Barring a broad-based crypto sell-off, BTC should avoid sub-$22,000 and the Second Major Support Level (S2) at $21,575. The Third Major Support Level (S3) sits at $20,087.

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 $22,192. The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($22,315) and the 50-day EMA ($22,192) would support a breakout from R1 ($23,803) to target R2 ($24,551) and $25,000. However, a fall through S1 ($22,315) and the 50-day EMA ($22,192) would give the bears a run at S2 ($21,575). A fall through the 50-day EMA would signal a shift in sentiment.