Daily News | Market Optimism Returns as Banks Get Bailed, Countdown to Ethereum's Shanghai Begins
Crypto Daily Digest: Market Optimism Returns with Bank Rescues and Stable Cryptocurrencies
Good morning, traders! Let’s seize this Friday relentlessly and make the most of it, and have a good weekend! 🚀
On Thursday, US stocks increased following a rescue package for First Republic Bank, with regional lenders particularly benefiting. This led to the S&P 500 having its biggest one-day advance since January, and the Nasdaq reaching a one-month high. Furthermore, Swiss regulators provided a lifeline to Credit Suisse Group, easing concerns. Janet Yellen’s prepared remarks also boosted confidence in the banking .
Asian equities are expected to rise as well, with Australian shares already experiencing an increase, and stock futures for benchmarks in Japan and Hong Kong gaining at least 1%. However, bond yields in Australia and the rate on the two-year Treasury rose above 4%. Meanwhile, the European Central Bank recently delivered a rate hike and stated that inflation is projected to remain too high for too long.
In the crypto space, recent bank failures have highlighted the reliance of digital currencies on traditional banks, raising questions about the future of mainstream banking’s relationship with unconventional finance. Regulators are looking to address weak links in the US banking , and the government is taking action against Silvergate, the first target of official scrutiny.
Despite efforts to cool down the US job market, the latest data has shown that Bitcoin and Ether have not been affected. While economic data remains important in the crypto space, BTC and ETH appear to be less tethered to traditional finance, with their correlation with the S&P 500, Nasdaq, and U.S. Dollar index narrowing.
Bitcoin has remained stable above $24,500 after the Swiss National Bank agreed to lend Credit Suisse $50 billion, and investors are hopeful that the US central bank will turn more dovish at its next rate-setting meeting. The largest cryptocurrency by market capitalization has remained range-bound between $24,000 and $25,000. Ether, the second-largest cryptocurrency by market value, was trading around $1,680.
However, the European Central Bank’s recent increase in interest rates by 50 bps has been seen as a precursor of the Fed raising interest rates by 25 bps, potentially having implications for the crypto market and its relationship with traditional finance. Moving forward, traders are now focused on the Federal Reserve’s policy meeting next week and are debating whether the central bank will increase interest rates.
Topic of the Day: The Countdown is On to Complete Ethereum’s PoS Transition with Shanghai Hark Fork
Ethereum‘s transition to a proof-of-stake network will be completed with the Shanghai hard fork, which has a target date of April 12. After the upgrade, validators will have the freedom to use their staked ETH for other purposes. The successful completion of several tests on the testnets has reassured Ethereum developers that the upgrade will run smoothly.
The Shanghai hard fork’s completion could positively impact Ethereum‘s total value locked (TVL) by making staked ETH liquid. This could increase liquidity and trading volume on Ethereum-based decentralized exchanges (DEXs) and make the proof-of-stake network more attractive to investors, leading to a higher number of validators and a more secure network.
However, some analysts are concerned that the completion of the hard fork could lead to a decrease in TVL. Validators may withdraw their staked ETH, decreasing the network’s security and investor confidence. Additionally, the completion of the hard fork could lead to a sell-off of ETH, causing a temporary decrease in its price and negatively impacting the TVL.
Ethereum (ETH) $1672.22 (-0.08%) - Neutral Outlook
Overview:
- Closest hourly support zone: 1664.5 - 1657.9
- Closest hourly resistance zone: 1671.0 - 1692.3
- Key Level: 1611.82 (Weekly Close of Feb. 01 - 08, 2021)
Looking at the daily timeframe, we can observe that ETH was recently rejected from the weekly channel, causing its price to drop and stabilize just above the weekly Fibonacci extension golden zone [1660.5 - 1482.0]. This rejection on March 14th has created a new daily resistance zone, indicated by a long candlestick wick. For ETH to continue rising, its price would need to close above the range of [1699.3 - 1777.0]. On the 4H timeframe, ETH has formed a descending wedge pattern, similar to BTC and other popular altcoins. This suggests that ETH is at a critical point where a break below this pattern could cause a return to the daily Fibonacci golden zone [1592.6 - 1549.1], where most of the volatility is likely to occur. Conversely, if ETH breaks and closes within the newly established resistance zone [1699.3 - 1777.0], it could potentially reach the weekly level of 1800.3.
Hourly Resistance zones
- 1671.0 - 1692.3
- 1701.6 - 1730.4
- 1777.0 - 1800.3
Hourly Support zones
- 1664.5 - 1657.9
- 1636.1 - 1611.8
- 1592.6 - 1549.1
