Ethereum’s Rally on U.S. Bank Intervention
The cryptocurrency market saw a major rally on March 13, with Ethereum’s native token Ether (ETH) leading the charge. The rally came after the U.S. regulators shored up wavering confidence in the banking sector, following the shutdown of Silicon Valley Bank (SVB) and Signature Bank.
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 also 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.
The rally was further bolstered by Binance’s announcement about converting its $1 billion worth of “Industry Recovery Initiative” fund to Bitcoin (BTC), Ether, and BNB (BNB).
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. 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.
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.
Overall, the U.S. regulators’ intervention in the banking sector has shored up confidence in the cryptocurrency market, with Ether leading the charge. However, the long-term outlook for Ether remains bearish, and investors should keep an eye on the technical indicators to gauge the token’s future direction.