Bi-monthly Advanced Technical Report
Binance News Team
Full disclaimer: This platform includes third party opinions. We do not endorse their accuracy. Digital asset prices can be volatile. Do your own research.See full terms here.
Disclaimer: This platform includes third-party opinions. We do not endorse their accuracy. Digital asset prices can be volatile. Do your own research. See full terms here and our risk warning here. Binance Futures products are restricted in certain countries and to certain users. This communication is not intended for users/countries to which restrictions apply.
All eyes are on the upcoming Ethereum Shanghai upgrade, which is set to occur in March 2023. The upgrade will open up withdrawals of over 16.5 million staked Ether, which comes after the merge that took place months ago, taking Ethereum from proof-of-work to proof-of-stake.
While not much volatility was observed after the Merge took place in the fourth quarter of 2022, the upcoming event may be different.
Analysts believe that the Merge was purely a technological shift with little economic impact, but the Shanghai upgrade will change the supply and demand of Ether – meaning more volatility may be in store for both in the short and long term.
The total supply of Ether is roughly 120 million currently, and over 10% of the supply will be unlocked with yield rewards when the Shanghai update arrives.
Staking yields will decrease following the upgrade, which means that investors who previously locked their Ether up may unstake and potentially invest in other assets that offer better yields. If this event were to occur, it could increase selling pressure on ETH.
Ethereum could expect volatility ahead
Although the entire staked balance cannot be withdrawn on the day of the Shanghai upgrade, total staking rewards of approximately 1 million ETH could be instantly taken out and liquidated into the market.
If this bearish scenario were to materialize, on-chain metrics suggest that Ethereum may be able to discover credible support between $1,595 to $1,647, where 2.16 million addresses hold nearly 10 million ETH.
The Ethereum weekly chart offers little clue as to directional intentions, as the second largest cryptocurrency by market capitalization has printed a symmetrical triangle pattern – where the swing highs are continuously decreasing and the swing lows are continuously increasing.
While the chart pattern depicts that ETH may be indecisive for the time being, a slice above or below the converging lines trend lines may cause a breakout for the token.
If bearish momentum were to continue to increase, Ethereum may find an additional foothold at the 61.8% Fibonacci retracement level at $1,492.
However, if the bulls were to shift the narrative for ETH toward the upside, some resistance may develop at the 50-week Simple Moving Average (SMA) at $1,746, coinciding with the topside trend line of the prevailing chart pattern.
Key resistance levels to watch:
$1,746 - 50-week SMA and local high
$1,926 - 127.2% Fibonacci extension level
Key support levels to watch:
$1,604 - 78.6% Fibonacci retracement level
$1,492 - 61.8% Fibonacci retracement level
Bitcoin rises above significant resistance
The largest cryptocurrency by market capitalization has just surged to a high not seen since August last year.
Despite the recent emergence of the death cross on the Bitcoin weekly chart, the leading cryptocurrency has risen above a critical hurdle – the 50-week SMA which sits at $24,353. Bitcoin has been trading under the 50-week SMA since April 2022.
For BTC to continue its bullish momentum, the bulls would need to aim to tackle the next significant hurdle at the 200-week SMA at $25,261 to target bigger aspirations.
Some credible support may emerge at the 78.6% Fibonacci retracement level at $23,791 if a bearish outlook prevails.
Key resistance levels to look out for:
$25,261 - 200-week SMA and local high
$27,907 - 127.2% Fibonacci extension level
Key support levels to look out for:
$24,495 - 50-week SMA
$23,791 - 78.6% Fibonacci retracement level
Binance Coin tests reliability of support
Binance Coin has witnessed minimal volatility over the past few weeks. On the weekly chart, BNB continues to tread carefully above the 50-week SMA which has been flipped from resistance into support since late January.
Similar to Ethereum, BNB has printed a symmetrical triangle pattern, showing little indication as to directional bias. The next key hurdle for the coin may be at the upper boundary of the chart pattern at $330, coinciding with the 61.8% Fibonacci retracement level.
If BNB dips below the 50-week SMA support level at $302, another foothold may develop the 38.2% Fibonacci retracement level at $288.
Key resistance levels to keep an eye on:
$330 - 61.8% Fibonacci retracement level
$370 - 100-week SMA
Key support levels to keep an eye on:
$302 - 50-week SMA
$288 - 38.2% Fibonacci retracement level
***Note: Binance encourages our users to trade responsibly. Trading can be engaging and fun, but trading is a serious business, and it can lead to financial and emotional distress. Trading derivatives carries risk, and cryptocurrencies and other digital assets often have high levels of price volatility.
View full text