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Key ideas:

  • It was a bearish Tuesday for bitcoin (BTC) and ethereum (ETH), with ETH seeing a nine-day winning streak come to an end.
  • The US economic calendar and corporate earnings weighed, although the mitigation of FTX contagion risk cushioned the decline.
  • However, it was a bullish start to Wednesday’s session.

Ethereum (ETH) fell 0.70%. Partially reversing a 1.55% gain from Monday, ETH ended the day at $1,566. The bearish session ended a nine-day winning streak.

A bearish start to the day saw ETH fall to an early morning low of $1,541. Avoiding the first major support level (S1) at $1,531, ETH hit an early afternoon high of $1,609. However, below the first major resistance level (R1) at $1,614, ETH fell back below $1,570 and into the red.

Tuesday, bitcoin (BTC) fell 0.29%. Partially reversing a 1.51% gain from Monday, BTC ended the day at $21,136. Notably, BTC held the $21,000 handle for the second time since Nov. 5.

A bearish start to the day saw BTC drop to an early low of $20,853. Avoiding the first major support level (S1) at $20,734, BTC hit an early afternoon high of $21,586. BTC breached the first major resistance level (R1) at $21,564 before a late pullback into the red.

US economic indicators force ETH bulls to take a breather

A quiet session on Tuesday left ETH and BTC in the hands of the US economic calendar and corporate earnings.

Data from the manufacturing sector rekindled fears of an economic recession in the United States, weighing on riskier assets. In January, the NY Empire State Manufacturing Index slipped from -11.2 to -32.9 versus -8.7 expected. Tuesday’s figure came after December’s ISM manufacturing and non-manufacturing figures which reflected a contraction in the private sector.

Corporate earnings did not provide support. Goldman Sachs (GS) reported a bigger-than-expected decline in quarterly earnings, while Morgan Stanley (MRS) beat the estimates.

While the combination of mixed earnings and weak manufacturing data was bearish, mitigating FTX contagion risk limited the downside.

Today, the US economic calendar will continue to influence, with wholesale inflation and retail sales leading the way. An unexpected pickup in wholesale inflation would test support for riskier assets.

For ETH, the Shanghai hard fork has become a hot topic, which exposes ETH to any hard fork chatter.

Ethereum (ETH) price

At the time of writing, ETH was up 1.26% at $1,585. A bullish start to the day saw ETH surge from an early low of $1,563 to a high of $1,593.

ETHUSD 180123 Daily Chart

Technical indicators

ETH needs to avoid a drop through $1,572 pivot to target the first major resistance level (R1) at $1,603 and Tuesday’s high at $1,609. A move back to $1,600 would signal another bullish session. However, US economic indicators and FOMC member chatter will need to be crypto-friendly.

In the event of an extended rally, the bulls would likely test the second major resistance level (R2) at $1,640. The third major resistance level (R3) is located at $1,708.

A drop through the pivot ($1,572) would bring into play the first major support level (S1) at $1,535. However, barring a risk-free sell, ETH should avoid below $1,500. The second major support level (S2) at $1,504 should limit the downside. The third major support level (S3) is located at $1,436.

ETHUSD 180123 Hourly Chart

Looking at the EMA and the 4-hour candlestick chart (below), it was a bullish signal. Ethereum was above the 50-day EMA, currently at $1,482. The 50-day EMA moved 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 ($1,482) would support a breakout of R1 ($1,603) at the R2 target ($1,640). However, a drop through S1 ($1,535) would give the bears a run to S2 ($1,504) and the 50-day EMA ($1,482). A drop through the 50-day EMA would signal a shift in sentiment.

ETHUSD 180123 4 hour chart

Bitcoin (BTC) price

At the time of writing, BTC was up 0.72% at $21,289. A mixed start to the day saw BTC drop to an early low of $21,115 before hitting a high of $21,379.

BTCUSD 180123 Daily Chart

Technical indicators

BTC needs to avoid a drop through $21,192 pivot to target the first major resistance level (R1) at $21,530 and Tuesday’s high at $21,586. A return to $21,500 would support another bullish session. However, crypto news feeds and US economic indicators are expected to support the market for a breakout.

In the event of an extended rally, BTC would likely test the second major resistance level (R2) at $21,925 and resistance at $22,000. The third major resistance level (R3) is located at $22,658.

A drop through the pivot would bring into play the first major support level (S1) at $20,797. Barring a crypto event-fueled selloff, BTC is likely to avoid below $20,500 and the second major support level (S2) at $20,459. The third major support level (S3) is located at $19,726.

BTCUSD 180123 Hourly Chart

Looking at the EMA and the 4-hour candlestick chart (below), it was a bullish signal. BTC was above the 50-day EMA, currently at $19,907. The 50-day EMA moved 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 ($19,907) would support a breakout of R1 ($21,530) at the R2 target ($21,925) and $22,000. However, a drop through S1 ($20,797) and S2 ($20,459) would give the bears a run at the 50-day EMA ($19,907). A drop through the 50-day EMA would signal a shift in sentiment.

BTCUSD 180123 4 hour chart



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