Last week we said:
There is clearly a shifting tide from bearish to bullish for ETH. This is confirmed by resistance zones flipping to support zones. If ETH can break $2800, a test of $3k is likely. If not, a return to $2600 is likely.
We also predicted $3300 as a resistance zone. Over the past 7 days, bullish catalysts in the crypto market have led to a surge in ETH price, which tested our resistance zones beautifully.
As you can see, the 4H 50 SMA acted as support, and after breaking $3k, this price level also flipped from resistance to support, spurring a move up to $3300 resistance, which failed to break. After this, the price retraced back to the 50 SMA, which bounced after a wick touch.
Let’s see if we can predict ETH’s price movements for this week.
Ethereum Price Analysis
Looking at the moving averages, a bullish golden cross is forming and will potentially confirm later this week if the 100 SMA crosses the 200 SMA (yellow). The 50 SMA may continue acting as support (currently at $3k) and below that, the 100 SMA (at $2800).
The Stochastic indicator looks ready for an upward move in momentum on this timeframe.
On the daily chart, we can see that the daily 50 SMA acted as resistance and ETH failed to break it on the first try. If we do see a bounce, I expect ETH to test this level again, currently at around $3200. We can also see an impending bearish death cross, but this could be invalidated if ETH continues its move upward.
On the daily timeframe, the RSI looks overbought and the stochastic looks ready for a move downward in momentum. We may have to consolidate or move down to support levels temporarily to regain steam and continue moving up.
ETH is currently trading above the weekly 50SMA, but it will need to close a candle above this level this weekend to confirm. The RSI is bouncing but is still oversold, and it just appears to be the beginning of an upward move on the Stochastic.
Ethereum Investor Sentiment
Ethereum Investor sentiment is leveling out at Neutral after months of extreme fear.
Ethereum Fundamental Analysis
One factor spooking the crypto markets over the past 24h is the alarming inflation report in the USA. If the federal reserve decides to aggressively raise interest rates, investors expect shockwaves to be felt throughout markets. Given BTC’s correlation with the stock market, this FUD has certainly played a role in BTC’s downtrend over the past couple of months. That being said, it’s fair to assume that this has already been priced into the markets – at least in part.
A Twitter user named yieldchad has noticed that the Federal Reserve added a meeting to their calendar that was not previously there. This is amid rumors of an emergency rate hike to curb accelerating inflation. If this happens, expect markets to react sharply. The newly scheduled meeting is set for Monday, Feb 14.
Another factor we look at is ETH’s issuance rate, which is directly influenced by network usage.
This reduction rate is lower than in previous weeks, indicating a downtrend in network usage.
Conclusion
Bullish catalysts are present on the 4H and weekly timeframes, but on the daily a pullback appears to be necessary. Paired with macro headwinds fueled by inflation fears, markets seem to teeter on a knife’s edge as uncertainty dominates. Levels to watch are the weekly candle close, $3300 resistance, and of course – the mysterious Fed meeting on Monday.
Support Zones:
- $3k (local)
- $2800 (4H 100 SMA)
- $2600 (historical)
- $2100
Resistance Zones
- $3200 (daily 50SMA)
- $3550 (daily 200 SMA)
- $3750 (daily 100 SMA)
Not investment advice. Do your own research.
