FX.co ★ Technical Analysis of ETH/USD for December 28, 2022

Crypto Industry News:

Big institutional investors continue to largely stay away from the crypto market as asset class volatility challenges money managers, Jared Gross, head of institutional portfolio strategy at JPMorgan Asset Management, said in an interview:

"As an asset class, cryptocurrencies are virtually non-existent for most large institutional investors. [...] Volatility is too high, no internal return to point to makes it very difficult," noted Gross.

Gross believes that most institutional investors "breathed a sigh of relief that they did not jump into this market", which is unlikely to happen in the near future.

The bear market also put an end to the idea that Bitcoin could be a form of digital gold or serve as a hedge against inflation, Gross noted, stating that it is obvious that this is not the case.

The year coming to an end was a period of dramatic declines in the cryptocurrency market. Bitcoin fell from $47,700 in January to below $17,000 at the end of December, while Ethereum fell from $3,700 to $1,200 over the same period, and the total cryptocurrency market capitalization fell from $2.2 trillion to nearly $810 billion.

Technical Market Outlook:

The Ethereum cryptocurrency has retraced 38% of the last wave down on the H4 time frame chart and is currently trading close to this level, consolidating the recent gains. The 100 SMA is seen at the level of $1,246, so bulls need to break through this level in order to continue the bounce towards the technical resistance seen at $1,278. The intraday volatility is very limited., nevertheless the key short-term technical support is seen at the level of $1,150 and if the level of $1,183 is broken, this will be the next target for bears.

Weekly Pivot Points:

WR3 - $1,258

WR2 - $1,240

WR1 - $1,230

Weekly Pivot - $1,221

WS1 - $1,212

WS2 - $1,201

WS3 - $1,184

Trading Outlook:

The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. The key technical support for bulls at $1,281 was broken already and the new yearly low was established at $1,074. There is a clear test of the 50 WMA located at the level of $1,080, so any breakout below the moving average and a weekly candle close below moving average will be considered as another indication of the down trend continuation. If the down move will be extended, then the next target for bears is located at the level of $1,000.