FX.co ★ Technical Analysis of ETH/USD for December 31, 2021

Crypto Industry News:

Kazakhstan has become a cryptocurrency mining hotspot since China launched a government offensive against Bitcoin miners in May. The Central Asian country maintains limited electricity rates and is a leading producer of fossil fuels. However, neglected infrastructure and insufficient generation capacity are not able to meet the rapidly growing demand for electricity needed to power energy-intensive cryptocurrency miners.

Authorities blame the growing deficit - consumption grew by 7% in the first three quarters of the year - on growing mines, while lawmakers have proposed higher electricity tariffs for miners. Industry has complained about their perception of being treated unfairly, especially after the sudden power cut last month.

In November, Kazakhstan's Data Center Industry and Blockchain Association reached an agreement with the national network operator KEGOC to ensure uninterrupted power supplies to registered miners. When the state-owned enterprise failed to fulfill its end of the contract, mining companies began to close their plants in the country. Another large crypto farm operator has closed its crypto farms in Kazakhstan and is also moving to the United States.

Technical Market Outlook:

The ETH/USD pair has made a new local low at the level of $3,582 after the key short-term demand zone had been broken, but bounce right back up and is currently trading above the technical resistance located a $3,750. The next target for bulls is seen at the level of $3,825 and $3,900. On the other hand, the next target for bears is seen at the level of $3,438 and this is the key long-term technical support for bulls, so please keep an eye on price behavior around this level.

Weekly Pivot Points:

WR3 - $4,862

WR2 - $4,406

WR1 - $4,271

Weekly Pivot - $4,012

WS1 - $3,876

WS2 - $3,618

WS3 - $3,465

Trading Outlook:

The ABCxABC complex corrective cycle might be terminated, so the next long-term target for ETH is seen at the level of $5,000. 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. The level of $3,677 is the key mid-term technical support for bulls.