FX.co ★ Technical Analysis of ETH/USD for May 19, 2023

Crypto Industry News:

FATF (Financial Action Task Force) is an intergovernmental organization dealing with the fight against international money laundering, also through crypto. It has its own Gray List, which includes countries and organizations that require increased observation and monitoring. There may also be countries and institutions that the FATF considers to be too inactive in counteracting money laundering and combating the financing of terrorism (and the use of cryptocurrencies is also considered as such). Pakistan was also on the list until October last year.

Removing Pakistan from the Gray List is an important step for this country in improving its situation in the international arena. To stay off the List, Pakistan will "never legalize cryptocurrencies and any cryptocurrency services will be banned in the country," its Minister of State for Finance Aisha Ghaus Pasha made clear at the Senate meeting. This statement was supported by other politicians, including the director of the Bank of Pakistan (SBP), Sohail Jawad. In addition, the Ministry of Information and Technology has already prepared a set of rules and regulations regarding the ban.

Almost 250 million people live in Pakistan and it is one of the most populous countries in the world. As we can read in the Triple A report from 2021, crypto is owned by 4.1% of the population of this country. It might not seem like much, but it translates into as many as 9 million crypto users! This is three times more than, for example, in Spain (about 3.3 million crypto holders) and almost twice as much as in Germany (almost 5 million).

Pakistanis own cryptocurrencies worth about USD 20 billion (data for 2021) and adoption is described there as relatively high. The local government has opposed digital assets before, for example in 2018 when the Central Bank of Pakistan banned crypto trading, but the interest of Pakistanis in this topic, as can be seen from the above reports, did not decrease.

This time, however, it may be different - the government of Pakistan has declared that it takes its stance towards the FATF seriously and more regulation and enforcement can be expected in this matter.

Technical Market Outlook:

The ETH/USD pair has made the lwer high at the level of $1,846 and then reversed lower again, so this level will work as the intraday technical resistance level. The momentum is weak and negative on the H4 time frame chart, so any sustained pressure from supply might result in another wave down. So far the intraday movement is limited and the bears keep testing the technical support located at $1,785. If this level is broken, then the bears might test the monthly low seen at $1,739.

Weekly Pivot Points:

WR3 - $1,913

WR2 - $1,886

WR1 - $1,844

Weekly Pivot - $1,814

WS1 - $1,795

WS2 - $1,764

WS3 - $1,712

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. This is the key level for bulls, so it needs to be broken in order to continue the up trend. The key technical support is seen at $1,368, so as long as the market trades above this level, the outlook remains bullish.