15.10.202111:24 Forex Analysis & Reviews: Technical Analysis of ETH/USD for October 15, 2021

Crypto Industry News:

Jon Cunliffe, deputy governor of financial stability at the Bank of England, said the risk of the burgeoning cryptocurrency market to the financial system is "relatively limited" at the moment, but could increase very quickly if regulators fail to keep pace.

In a speech to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Cunliffe said policymakers around the world had only just begun to develop the framework necessary to properly regulate digital assets, but they should continue to work "as a matter of urgency". The vice-governor spoke about the risk that cryptocurrencies and stablecoins can pose when combined with traditional financial systems through individuals, financial institutions, hedge funds, and banks.

Given that digital assets continue to go to these institutions, the sentiment towards cryptocurrency volatility could result in "investors selling other assets that are judged risky." Cunliffe referred to the interconnection between cryptocurrencies and traditional finance as potentially causing a "transferred through the financial system" shock should something go wrong.

One of the scenarios Cunliffe proposed was that the price of an unsecured cryptocurrency would drop to zero. In addition, price volatility - even among major cryptocurrencies - "can trigger margin calls on crypto positions, forcing leveraged investors to find cash to meet them, leading to the sale of other assets and generating spillovers to other markets."

Technical Market Outlook:

The ETH/USD pair has made another higher high at the level of $3,881 which is just above the technical resistance seen at $3,860. This might be the last wave in the impulsive cycle, the wave 5 of the overall wave progression, so a some kind of correction might be expected soon. The nearest technical support is seen at the level of $3,677. The momentum is strong and positive, so the bulls might risk to push the prices towards the level of $4,000 before any meaningful correction will occur.

Weekly Pivot Points:

WR3 - $4,097

WR2 - $3,885

WR1 - $3,704

Weekly Pivot - $3,473

WS1 - $3,298

WS2 - $3,083

WS3 - $2,876

Trading Outlook:

Ethereum have started the next wave up and violated the long-term target at the level of $3,550. The next long-term target for ETH is seen at the level of $4,394. Nevertheless, in order to continue the long-term up trend, the price can not close below the technical support at the level of $2,906. The level of $1,728 (61% Fibonacci retracement of the last big impulsive wave up) is still the key long-term technical support for bulls.