FX.co ★ Technical Analysis of ETH/USD for January 22, 2021

Crypto Industry News:

One of the first steps taken by President Joe Biden on his first day in office was the freezing of the federal regulatory process, including the controversial private cryptocurrency wallet legislation proposed by former Treasury Secretary Steven Mnuchin.

The above decision was included in a White House memorandum addressed to the heads of various federal agencies, including the Financial Crimes Enforcement Network (FinCEN). The decree does not specify a cryptocurrency wallet proposal, but does make a general recommendation to freeze any agency rules pending feedback for a period of 60 days from the date of the memorandum.

The proposal for a self-hosted cryptocurrency wallet was made by FinCEN on December 18 under the rule of former US Treasury Secretary Steven Mnuchin. If the regulations were implemented, it would require banks and money service companies to file reports, keep records and verify the identity of customers who transact to and from private cryptocurrency wallets.

The proposal was widely criticized by industry leaders, including Square CEO Jack Dorsey, who said collecting a counterparty's name and address should not be required for cryptocurrencies, as it is not required for cash.

Other critics have also argued that it would be technically impossible to meet Mnuchin's requirements for many projects, as smart contracts do not contain information about the name or address.

Technical Market Outlook:

The ETH/USD pair has dropped significantly during the last 24h. The bears has managed to push the price towards the technical support seen at the level of $1,070, the local low was made at the level of $1,048. Since then the market bounced a little, but did not make it above the level of $1,223, which is the key short-term technical resistance now. If the bears will intensify the pressure, then the next target for them is seen at the level of $1,008 and $922. The weak and negative momentum supports the short-term bearish outlook.

Weekly Pivot Points:

WR3 - $1,800

WR2 - $1,551

WR1 - $1,448

Weekly Pivot - $1,183

WS1 - $1,077

WS2 - $810

WS3 - $699

Trading Recommendations:

The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $1,500, so any correction or local pull-back should be used to open the buy orders. Please notice, the up trend starting to go vertical, so the volatility will be higher than average. The bullish scenario is valid as long as the level of $830 is broken.