ether (ETH) bulls are facing a do-or-die moment as the world’s second-largest cryptocurrency by market capitalization powers the leading smart-contract-enabled. Ethereum Blockchain reclaimed key support at $1,420 in the form of its 200-day moving average.
ETH The price declined below the 200DMA at $1,408 before finding some resistance to trade near $1,450 once again. But ETH/USD is trading down about 6% on the day according to TradingView, and has fallen more than 8% over the past 24 hours according to CoinMarketCap.
Cryptocurrency markets are taking a broad beating on Thursday in the wake of Wednesday The Fall of Crypto-Friendly Bank SilvergateWhich has raised concerns that fellow crypto-friendly financial institutions SVB Financial and Signature Bank could be next.
Silvergate’s demise is widely seen as a blow to crypto adoption, given the bank’s prior efforts to better bridge the fiat monetary system and crypto exchanges between the two via its now-defunct 24/7 wire transfer service. given to add.
Ongoing macro headwindThe US Dollar and US yields have seen significant gains in recent weeks as the market has raised its stakes on Fed tightening, things are getting complicated. Crypto traders will be watching Friday’s US jobs report and next week’s US CPI report, which could determine whether the Fed hikes interest rates by 25 or 50 bps later this month.
200DMA is key to ETH’s near-term outlook
The 200DMA is viewed by most traders as a key technical level. A break above or below this can signal, or serve as confirmation of, a significant change in the market’s near-term momentum. Meanwhile, if the market finds strong support at the 200DMA, or fails in an attempt to break it, it is also sometimes interpreted as a sign that the market is not yet ready to change direction, and may continue to hold its position. May return to previous trend.
In fact, the 200DMA has certainly been an important level for Ethereum in recent months. This served as a price action ceiling twice in 2022 (April and November), twice confirming that the Ether bear market was still in play. Meanwhile, Ether’s decisive break above its 200DMA in mid-January was seen as a sign that the 2022 bear market may well be over, with the cryptocurrency moving to find strong support above it in mid-February. Has been
If Ethereum loses its hold on its 200DMA it will be a significant blow to the near-term sentiment of the market. In fact, a bullish test of the mid-December highs in the $1,350s would become highly likely, with a break below here possibly opening the door for a run toward November’s sub-$1,100 lows.
A saving grace for ETH may come in the form of its 14-day Relative Strength Index (RSI) which is close to entering oversold territory, indicating that some consolidation may be coming soon.