FX.co ★ Technical Analysis of ETH/USD for July 13, 2023

Crypto Industry News:

On July 12, Senators Cynthia Lummis and Kirsten Gillibrand submit their revised Cryptocurrency Bill to Congress. The Responsible Financial Innovation Act, because this document is in question, aims to classify most cryptocurrency assets as commodities.

There has long been a debate in the US about whether cryptocurrencies are securities or commodities. According to SEC chairman Gary Gensler, only bitcoin is a commodity. This would mean that the rest of the digital assets are securities, i.e. assets under his Commission.

SEC policy and Gensler's opinion, however, arouse considerable controversy. Anyway, he himself did not want to confirm his theses during the hearing that took place in Congress.

All of the above is important because if we consider cryptocurrencies as commodities, they will fall under the umbrella of the Commodities Futures Trading Commission (CFTC), not the SEC, which, according to many people, "stimulates innovation in financial technologies".

The senators mentioned in the introduction want to save the US blockchain market. The newly proposed rules are designed to protect investors and prevent the collapse of larger projects that paralyzed the industry in 2022 (e.g. bankruptcy of FTX). At the same time, both politicians are not in favor of enforcement actions, lawsuits or requests to freeze stock exchange assets, which could harm investors.

The new law, if passed, would require cryptocurrency exchanges to hold customer funds in third-party trusts. It would also prevent internal trading by exchanges using their own funds or tokens. In addition, the CFTC would have the authority to supervise affiliates of the exchanges - all to prevent wrongdoing. This is a reference to the FTX and Alameda scandal.

Technical Market Outlook:

The ETH/USD pair has bounced from the key short term technical support seen at the level of $1,816, but the bounce was capped at the level of $1,904 and the market reversed again. So far the ETH has been trading inside a narrow range located between the levels of $1,904 - $1,862 and bulls made a few failed attempt to rally higher, so the ETH market participants await the fundamental trigger to truly break out from the consolidation. The intraday technical support is seen at $1,862 and the intraday technical resistance is located at $1,904.

Weekly Pivot Points:

WR3 - $1,897

WR2 - $1,877

WR1 - $1,867

Weekly Pivot - $1,856

WS1 - $1,847

WS2 - $1,835

WS3 - $1,822

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.