The fact that ETH has been able to hold above the $1,400 level, for now, means that there hasn’t yet been a sustained, convincing break below the key 200-Day Moving Average level at $1,423. The 200DMA acted as strong resistance in 2022 and has been touted as a key support level for 2023.
A break below it would be a massive blow to the medium-term bullish ETH thesis, as a sustained break above the 200DMA (as seen earlier this year) is seen as a key indicator of a positive shift in the market’s medium-term momentum. If ETH falls back under $1,400, this momentum would have arguably evaporated.
Eyes will be on next week’s key US CPI inflation data release. ETH bulls will be hoping that the data surprises to the downside, resulting in markets further pricing out the risk of a 50bps rate hike from the Fed later this month. Bulls will also be hoping for some calm relating to the troubles faced by crypto-friendly US banks.
Key resistance to keep an eye on if ETH does bounce is around $1,460 in the form of the February lows. Meanwhile, to the downside, bears will be eyeing a retest of support at $1,350. A break below here could open the door to a retest of last November’s lows under $1,100.
According to DeFi Llama citing on-chain data, this is a key area of support given that a break below it would spark a massive $68 million in liquidations in long positions taken out on decentralized exchanges (DEX). Another level to watch, according to DeFi Llama, is around $1,240, where $30 million in DEX long are at risk of being wiped out.
