06.02.202309:57 Forex Analysis & Reviews: Technical Analysis of ETH/USD for February 6, 2023

Crypto Industry News:

A set of rules to mitigate cryptocurrency risks was signed last week by the White House and National Economic Council director Brian Deese and Office of National Security Advisor director Jake Sullivan.

The statement, at first glance, is not much of a surprise. The cryptocurrency industry had a really tough year in 2022. Even trying to keep up with various companies declaring bankruptcy resulted in a significant increase in database access court fees. The White House statement, however, points to a more cautious approach to cryptocurrencies than U.S. President Joe Biden's decree on digital assets last March.

The statement begins with a brief summary of a "tough year" for cryptocurrencies. However, he notes that the crypto sector is not moving into the wider financial ecosystem. A White House official says this is part of Biden's team's ongoing efforts to close regulatory loopholes in the cryptocurrency ecosystem, and points to congressional actions such as Senate Banking Committee Sherrod Brown's letter to Treasury Secretary Janet Yellen regarding cryptocurrency regulation. It confirms that the White House's efforts will focus more on issues such as implementing the Executive Order's recommendations.

Last week's statement referenced previous White House decisions such as digital asset regulations and statements issued by departments of the federal government. Also included is the joint position of banking supervisors published last week.

Technical Market Outlook:

The ETH/USD pair made a new local high at the level of $1,695 and then market reversed sharply lower. The Bearish Engulfing candlestick pattern was made at the H4 time frame chart, so the outlook still remains bearish. The nearest technical support is seen at $1,525 and $1,487. The intraday technical support is seen at $1,603 and the key technical support is located at $1,350 and only clear and sustained breakout below this level would change the short-term outlook to bearish. Please keep an eye on the $1,487 technical support as any violation of this level would likely extend the drop towards $1,345, but in order to do this, the volatility must increase significantly. The next target for bulls is seen at the level of $1,788 (September 2022 high).

Weekly Pivot Points:

WR3 - $1,630

WR2 - $1,625

WR1 - $1,623

Weekly Pivot - $1,620

WS1 - $1,618

WS2 - $1,614

WS3 - $1,609

Trading Outlook:

The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August 2022 at the level of $2,029. The key technical support for bulls at $1,281 was broken already and the new swing low was established at $1,074. There is a clear test of the 50 WMA located at the level of $1,080, so any breakout below the moving average and a weekly candle close below moving average will be considered as another indication of the down trend continuation. If the down move will be extended, then the next target for bears is located at the level of $1,000.