On Wednesday, ether (ETH) slumped by 19.1%, with support at $2,200 preventing heavier losses.
Bearish sentiment continued this morning as investors responded to Tether (USDT) giving up parity with the dollar.
Technical indicators remain bearish, with ETH sitting below the 50-day EMA.
Ether (ETH) slid by 19.1% on Wednesday. Reversing a 5.23% gain from Tuesday, ether ended the day at $2,078. Stablecoin movements weighed on Wednesday.
A bullish start to the session was short-lived, with ether sliding to a day low of $2,003 before steadying. Support at $2,000 was key to avoiding heavier losses on the day.
Failure to restore the TerraUSD peg with the dollar left the crypto market deep in the red.
Stablecoin Angst Builds as Tether (USDT) Loses Parity with the Dollar
Stablecoins continued to weigh on ether and the broader crypto market this morning. Following the de-pegging of TerraUSD, Tether (USDT) was in the spotlight in the early hours.
This morning, USDT was down 0.97% to $0.9862, partially recovering from a morning low of $0.9511. While USDT has visited sub-$0.90 levels on numerous occasions this year, today’s decline couldn’t have come at the worst time.
On Wednesday, UST tumbled to a day low of $0.1977 before finding support. Conditions did not improve this morning, with UST down 43.13% to $0.4482.
Events this week have driven stablecoin and broader crypto market scrutiny. The Federal Reserve, US Secretary Janet Yellen, and SEC Chair Gary Gensler are among those voicing the need for greater oversight.
The threat of a regulatory overhaul added to the market angst.
Ethereum (ETH) Price Action
At the time of writing, ether (ETH) was down 6.67% to $1,939. Ether fell to an early low of $1,714 before finding support. It was the lowest level since a June 2021 low of $1,706.
ETH will need to move through the $2,179 pivot to target the First Major Resistance Level at $2,350.
Broader market sentiment would need to improve to support a breakout from the morning high of $2,181.
In the event of an extended rally, ETH should test resistance at $2,500. The Second Major Resistance Level sits at $2,623.
Failure to move through the pivot would leave the First Major Support Level at $1,903 in play. Barring another extended sell-off throughout the day, ETH should avoid sub-$1,700. The Second Major Support Level at $1,728 and support at $1,700 should limit the downside.
The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. ETH sits below the 50-day EMA, currently at $2,455. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA also pulled back from the 200-day EMA, a bearish signal.
A move through the 50-day EMA would bring $2,600 into play.
This article was originally posted on FX Empire