23.02.202310:23 Forex Analysis & Reviews: Technical Analysis of ETH/USD for February 23, 2023

Crypto Industry News:

The CEO of the Bank for International Settlements (BIS) was critical of stablecoins during his recent speech. In his opinion, this type of asset has no chance to become "money of the future".

On February 22, BIS Director General Agustin Carstens appeared at the Asia Conference as a guest of the Monetary Authority of Singapore (MAS). During his speech, he devoted a lot of attention to the topic of stablecoins and CBDC.

In his opinion, last year's turmoil on the cryptocurrency market resulted in the loss of confidence of the Bank for International Settlements in this sector. Moreover, he believes that stablecoins do not have the appropriate predispositions to become "money of the future". Still, central bank digital currencies and tokenized deposits are a key aspect of financial innovation, Carstens said.

The head of the BIS announced that stablecoins tied to the value of other assets, such as fiat currencies, do not operate under regulatory requirements. He added that this type of assets lack collateral, which is covered, for example, by bank deposits.

Supervisory authorities and regulators from around the world have repeatedly emphasized their skeptical view of stable cryptocurrencies. Their concerns about the fundamentals and use of these assets were voiced long before the Terry stablecoin crash. Recall that this event took place in May 2022. The algorithmic stablecoin - UST - then lost its rigid link to the US dollar, and its value fell to practically zero. This led to many losses in the market, which totaled about 40 billion dollars.

This year, regulators announced that they intend to implement new regulations on stablecoins. They also indicate that many entities from this market, primarily issuers, will not be able to meet the new regulations.

Technical Market Outlook:

The Ethereum market had broken below the 38% Fibonacci retracement level seen at $1,636 and made a new local low at the level of $1,596 before the bounce had happened (the level of $1,596 will act as the intraday technical support from now on). The weak momentum on the H4 time frame chart supports the short-term bearish outlook for ETH. Sustained breakout below the level of $1,487 would change the mid-term outlook to bearish, so please keep an eye on the $1,487 technical support. Any violation of this level would likely extend the drop towards $1,345, but in order to do this, the volatility must increase significantly.

Weekly Pivot Points:

WR3 - $1,774

WR2 - $1,726

WR1 - $1,709

Weekly Pivot - $1,678

WS1 - $1,661

WS2 - $1,630

WS3 - $1,581

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. The key technical support for bulls at $1,281 was broken already and the new swing low was established at $1,074. There is a clear test of the 50 WMA located at the level of $1,080, so any breakout below the moving average and a weekly candle close below moving average will be considered as another indication of the down trend continuation. If the down move will be extended, then the next target for bears is located at the level of $1,000.