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ETHUSD Downward Dynamics – in the Future

2/21/2023 1:32 PM

The ETH/USD pair is unsuccessfully trying to resume growth after stabilizing around 1687.50 (Murrey level [8/8]).

In addition to long-term negative factors, such as an increase in the interest rate of the US Federal Reserve and increased pressure on the cryptocurrency industry from US regulators, which, according to CoinShares International, has already led to an outflow of 100.0M dollars in investments, the strengthening of ETH is hampered by fears related to the release of a new update to the Ethereum network called Shanghai in March. This fork will complete the transition of the network to the Proof-of-Stake (PoS) algorithm, and the central innovation will be the ability to withdraw previously blocked tokens in the network, the volume of which is now estimated at 16.6M ETH for a total of about 28.0B dollars. The implementation of this function is assessed by experts ambiguously: many believe that gradually most of the released volume of assets will be brought to the market, which will entail serious pressure on the price. Investors will begin to take profits since, at the time of placement, the ETH coin was worth about 600.0 dollars, and now it is much more. Other analysts expect the upgrade to spur investment as users can freely dispose of previously locked assets. In any case, the new fork will be one of the central events of the year for Ethereum, and attention to it remains high.

Now, the market situation looks uncertain. The trading instrument is around 1687.50 (Murrey level [8/8]), and to resume the downward correction, it needs to break below the support zone of 1650.00–1625.00 (Fibonacci correction 23.6%, the middle line of Bollinger bands, Murrey level [6/8]), and then 1500.00 (Murrey's level [4/8]) and 1375.00 (Murrey's level [2/8]) can become the targets of the decline. The key "bullish" level is 1750.00 (Murrey level [8/8]), the breakout of which will give the prospect of growth to 1875.00 (Murrey level [+2/8]) and 2000.00 (Fibonacci correction 38.2%).

Technical indicators do not give a single signal: Bollinger bands are directed upwards, but Stochastic has left the overbought zone. MACD histogram is increasing in the positive zone; however, it has signs of a "bearish" divergence from the price chart, which increases the likelihood of a correction.

Resistance levels: 1750.00, 1875.00, 2000.00. | Support levels: 1625.00, 1500.00, 1375.00.

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