FX.co ★ Technical Analysis of ETH/USD for October 4, 2021

Crypto Industry News:

The Iranian government will allow licensed cryptocurrency miners to resume operations after a three-month ban imposed by former President Hassan Rouhani on May 26, 2021.

The original ban was introduced due to concerns about the stability of the unreliable power grid in the country. The Middle East country experienced extensive power cuts during the summer, which former President Rouhani attributed to extreme heat. On some days the heat was almost 49 degrees Celsius.

In light of power cuts and water shortages, Rouhani decided to ban cryptocurrency mining in hot weather to ensure citizens can use air conditioning - although there have been doubts in some quarters as to how much energy mining actually consumes domestically. As the temperatures drop and Ebrahim Raisi took office on August 3, 2021, the ban on mining cryptocurrencies was lifted.

It is estimated that 4.5% to 7% of the world's cryptocurrency mining takes place in Iran. It should come as no surprise that Iran boasts some of the cheapest electricity prices in the world thanks to its abundant resources of fossil fuels such as natural gas.

There are reports that suggest that the country looks favorably on Bitcoin mining as a way to avoid US sanctions. Iran currently suffers from an almost complete US embargo, which is negatively affecting the country's economy. With the current estimated levels of cryptocurrency mining in Iran, revenues are estimated at around $ 1 billion.

Despite the ban, underground mining reportedly continued, and news came Wednesday that Ali Sahraee, director of the Tehran Stock Exchange, had resigned after state media reported that cryptocurrency mining was taking place following the ban on the stock exchange.

Technical Market Outlook:

The ETH/USD pair has broken above the trend line resistance located at the level of $3,385 and made a new local high at the level of $3,489. The rally ended with a Pin Bar candlestick formation, so a temporary pull-back towards the level of $3,337 or $3,252 is on the way. The key short-term technical support is located at the level of $3,173. Please notice, that the bulls had violated all of the Fibonacci retracement levels already.

Weekly Pivot Points:

WR3 - $4,444

WR2 - $3,970

WR1 - $3,761

Weekly Pivot - $3,277

WS1 - $3,057

WS2 - $2,590

WS3 - $2,360

Trading Outlook:

Ethereum have started the next wave up and violated the long-term target at the level of $3,550. The next long-term target for ETH is seen at the level of $4,394. Nevertheless, in order to continue the long-term up trend, the price can not close below the technical support at the level of $2,906. The level of $1,728 (61% Fibonacci retracement of the last big impulsive wave up) is still the key long-term technical support for bulls.