FX.co ★ Technical Analysis of ETH/USD for February 8, 2023

Crypto Industry News:

The New Year's 40% rebound in Bitcoin's price charts led to the largest influx of funds into the market from institutional investors since June 2022. The last week of January alone saw an influx of funds amounting to USD 117 million.

On January 30, the CoinShares group published a report called "Digital Asset Fund Flows Weekly", from which we learn what the investment situation on the bitcoin market looked like recently. It seems that the first cryptocurrency is still recognized by institutions as an attractive investment opportunity.

Last month was one of the better Januarys for the bitcoin market in years. Bitcoin shot up by 40% at that time, which affected investor sentiment and reduced losses suffered by this sector as a result of the tragic end of the year.

Last week's US bears seem to have changed their minds after $117m inflows, including $26m from the US. An interesting fact is that investors from Germany account for 40% of the result from the last week of January. The second largest group are Canadians. Moreover, although the altcoin segment also saw a nice price rally, the interest of the institution is dominated by BTC.

In the meantime, after a noticeable rebound in early 2023, BTC's largest institutional investment vehicle has fallen into a lower correction that continues to deepen its discount. As of Feb. 7, Grayscale Bitcoin Trust (GBTC) is trading at 43% off Bitcoin's spot price after it jumped 36.2% in mid-January.

However, GBTC has been struggling with some problems for some time. Grayscale is trying to force US regulators to approve the conversion to the country's first bitcoin-listed fund.

The foundations of the second largest cryptocurrency in terms of market capitalization may be strongly affected by the recent announcement of Visa Vice President Cuy Sheffield. Well, during the event, StarWare announced that his company is testing large transactions using this Ethereum blockchain. It was mentioned that Visa is exploring ways to accept payments in stablecoins through this blockchain.

Technical Market Outlook:

The ETH/USD pair has bounced from the technical support seen at $1,603 and is approaching the last swing high. The next target for bulls is seen at the level of $1,788 (September 2022 high). The intraday technical support is seen at $1,603 and the key technical support is located at $1,350, so only clear and sustained breakout below this level would change the short-term outlook to bearish. Please keep an eye on the $1,487 technical support as any violation of this level would likely extend the drop towards $1,345, but in order to do this, the volatility must increase significantly.

Weekly Pivot Points:

WR3 - $1,630

WR2 - $1,625

WR1 - $1,623

Weekly Pivot - $1,620

WS1 - $1,618

WS2 - $1,614

WS3 - $1,609

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 2022 at the level of $2,029. The key technical support for bulls at $1,281 was broken already and the new swing 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.