Why is Ethereum (ETH) price up today?
Ethereum’s native token, Ether (ETH), rallied on March 13 after the U.S. regulators shored up wavering confidence in the banking sector led by the shutdown of $209 billion Silicon Valley Bank (SVB) and $110 billion Signature Bank.
U.S. emergency measures help Ether recovery
Ether’s price rose over 3% to around $1,635, its highest level in almost two weeks. The gains came as a part of the token’s broader rebound move that saw it rallying nearly 20% from its March 10 low of $1,369.
On March 12, the U.S. Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corp. assured the SVB and Signature Bank depositors that they would get their money back. In addition, the regulators noted that the U.S. government’s bank-deposit insurance fund would cover all deposits instead of the standard $250,000.
They further promised to launch a new Bank Term Funding Program worth $25 billion to offer short-term loans to banks that pledge U.S. Treasury securities, mortgage-backed securities, and other collateral.
The intervention stopped the depositor panic and helped those markets recover that got hit last week amid fears of a wider banking contagion, including cryptocurrencies. Ether, the second-largest crypto by market cap, recovered likewise to pare its March losses.
Binance’s $1B crypto shopping plan
Ethereum’s gains also coincided with Binance’s announcement about converting its $1 billion worth of “Industry Recovery Initiative” fund to Bitcoin (BTC), Ether, and BNB (BNB).
$1B buying pressure on $BTC, $ETH and $BNB https://t.co/WOm2AOcOVR
— Ki Young Ju (@ki_young_ju) March 13, 2023
What’s next for ETH?
ETH/USD daily chart
The March 10 selloff took the ETH price closer to the technical downside target of $1,250. The bears missed the target by a whopping $100 while leaving behind two hints about a potential short-term uptrend.
First, the Ether price’s March 10 candlestick appears like a Dragonfly Doji, which signifies bullish rejection. And second, the price bounces after Ether’s daily relative strength index (RSI) dropped to 31, just one point above the oversold threshold.
From a technical perspective, the near-oversold bounce hints at an extended recovery period for Ether, at least unless the RSI reaches the overbought threshold of 70.
Related: Breaking: Silicon Valley Bank UK arm acquired by HSBC for 1 pound
In this scenario, ETH price could rally to $1,720 — a recent resistance level — by the end of March, up almost 8% from current price levels. Conversely, the price could return to its latest range of support at around $1,500.
ETH/USD weekly chart
On the weekly chart, the long-term outlook for Ether looks skewed toward bears as the ETH/USD pair eyes pullback after hitting the resistance line of its prevailing symmetrical triangle.
If ETH starts correcting from its current price levels (especially amid the ongoing macro uncertainty), the next stop is like to be the triangle’s support line, bringing the $1,250 downside target back into the picture.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
