On Wednesday, Ethereum (ETH) fell 2.82% to close the day at $1,657. Contagion risk from Silicon Valley Bank and Signature Bank re-emerged, and the focus turned to Credit Suisse. Technical indicators remained bullish, with $2,000 in the offing.
Ethereum (ETH) fell 2.82% on Wednesday. Reversing a 1.37% gain on Tuesday, ETH ended the day at $1,657. Despite the bearish session, ETH revisited the $1700 level for the third session in a row.
A mixed start to the day saw ETH rally to an early high of $1,723. Failing to reach the first major resistance level (R1) at $1,778, ETH dropped to a low of $1,614 by late afternoon. ETH briefly fell through the first major support level (S1) at $1,641, before closing the day at $1,657.
Banking Sector Troubles Overshadow Shanghai Update News
On Wednesday, investor attention turned to the European banking sector. With the US government committed to containing the fallout from the collapse of Silicon Valley Bank (SIVB) and Signature Bank (SBNY), Credit Suisse Group AG became the latest target as banks across Europe stumbled in red numbers.
Investor sentiment toward the Fed’s monetary policy failed to provide support, despite US economic indicators supporting a 25 basis point interest rate hike in March.
US retail sales and wholesale inflation figures failed to impress. The producer price index fell 0.1% in February against an expected increase of 0.3%. Retail sales figures were more disappointing, falling 0.4% in February versus an expected drop of 0.3%. Retail sales rose 3.2% in January.
On Wednesday, the NASDAQ Composite Index rose 0.05%, while the Dow and S&P 500 posted losses of 0.87% and 0.70%, respectively. The NASDAQ mini is up 66 points this morning.
While problems in the banking sector weighed on ETH, continued progress towards the Shanghai hard fork was positive for ETH.
According to CryptoQuant, ETH net staking inflows stood at 18,976 ETH on Wednesday. However, while up from 18,720 ETH on Tuesday, inflows are well below the 2023 high of 198,560.
A move to 20,000 levels would be bullish for ETH. An upward trend in staking inflows would suggest net inflows rather than outflows once participants are able to withdraw staked ETH.
Ethereum (ETH) Price Action – Technical Indicators
A mixed start to the day saw ETH rally to an early high of $1,666 before falling to a low of $1,638. ETH needs to move through the $1,665 pivot to target the first major resistance level (R1) at $1,715 and Wednesday’s high of $1,723. A return to $1,700 would signal a bullish session. However, the Shanghai update news and crypto news wires should support ETH to support a breakout.
In the event of a prolonged rally, the bulls would likely test the second major resistance level (R2) at $1,774 and resistance at $1,800. The third major resistance level (R3) sits at $1,883.
A hold above S1 ($1,606) and the 50-day EMA ($1,600) would support a break out of R1 ($1,715) to the R2 ($1,774) target and $1,800. However, a drop-through S1 ($1,774) $1,606) and the 50-day EMA ($1,600) would give bears a run at the 100-day EMA ($1,589) and 200-day EMA ($1,586). A drop through the 50-day EMA would send a bearish signal.
By Audy Castaneda