Ethereum’s native token Ether (ETH) rallied on March 13 after US regulators bolstered faltering confidence in the banking sector led by the $209 billion Silicon Valley Bank (SVB) shutdown and $110 billion from Signature Bank.
US emergency measures help Ether recovery
Ether price rose more than 3% to around $1,635, its highest level in almost two weeks. The gains came as part of the token’s broader rebound move that saw it rise nearly 20% from its March 10 low of $1,369.
On March 12, the US Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation assured SVB and Signature Bank depositors that they would get their money back. In addition, regulators noted that the US government’s bank deposit insurance fund would cover all deposits instead of the standard $250,000.
They also promised to launch a new $25 billion Bank Term Financing Program to provide short-term loans to banks that pledge US Treasury securities, mortgage-backed securities and other collateral.
The intervention halted depositor panic and helped recover markets that took a hit last week amid fears of broader banking contagion, including in cryptocurrencies. Ether, the second largest cryptocurrency by market capitalization, has also rallied to pare its March losses.
Binance $1B Cryptocurrency Purchase Plan
Ethereum’s gains also coincided with Binance’s announcement of converting its $1 billion “Industry Recovery Initiative” fund to Bitcoin (BTC), Ether, and BNB (BNB).
Buying pressure of 1,000 million dollars $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 sell-off on March 10 brought the price of ETH closer to the downside technical objective of $1,250. The bears missed the target by a whopping $100 and left two clues about a possible short-term uptrend.
First of all, the March 10 candlestick for ether price appears as a Doji dragonfly, which signifies a bullish rejection. And second, the price bounces after Ether’s daily Relative Strength Index (RSI) fell to 31, just one point above the oversold threshold.
From a technical perspective, the near-oversold bounce suggests an extended rally period for Ether, at least unless the RSI hits the 70 overbought threshold.
Related: Breaking: Silicon Valley Bank UK arm acquired by HSBC for £1
In this scenario, ETH price could rally to $1,720, a recent resistance level, by the end of March, nearly 8% higher than current price levels. Conversely, the price could return to its last support range around $1,500.
ETH/USD weekly chart
On the weekly chart, the long-term outlook for Ether appears skewed to the downside, as the ETH/USD pair is contemplating a pullback after touching the resistance line of its prevailing symmetrical triangle.
If ETH starts to correct from its current price levels (especially amid ongoing macroeconomic uncertainty), the next stop will be the triangle support line, bringing back the downside target of $1,250.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
