Technical Analysis of ETH/USD for September 23, 2020

Crypto Industry News:

The People's Bank of China places great emphasis on the geopolitical importance of the development of the central bank's digital currency in this country.

An article published in the media this weekend said Beijing should "accelerate [CBDC development] to take the lead" in the global race to issue digital currencies. In addition, it was argued that China should seize the advantage of becoming the first player in the digital currency arena it describes as the "new battleground" of interstate competition. At stake would be significant changes in the geopolitical status quo in international finance, and a chance to break the dollar's hegemony and internationalize the yuan.

In addition, feedback from the digital currency data issued by the PBoC would be beneficial for domestic monetary policy, which is all the more important in the post-pandemic situation. The article indicates that by the end of April 2020, the PBoC research unit filed 130 patent applications related to cryptocurrencies, which cover a range of issuing, circulation and implementation.

The central bank's research unit was first established in 2015, and the project moved forward in 2020. Digital wallet testing for currency is ongoing under the responsibility of Chinese state-owned commercial banks.

In August, Beijing announced the trial launch of its digital yuan in Shanghai, Beijing, Guangzhou and Hong Kong, involving 400 million people, or about 29% of the country's population.

PBoC also plans to use digital yuan at the 2022 Winter Olympics. A senior management member recently indicated that the currency would be "primarily positioned" as M0 and as such would have to comply with cash management laws and regulations.

Technical Market Outlook:

The ETH/USD pair has been consolidating in a narrow range that looks like a Triangle pattern. The high of the triangle was made at the level of $349.13 and the low was made at the level of $336.83. In a case of a brakout lower, the first target for bears is seen at the level of $332.28 and the next one is located at the level of $323.87. The key short-term technical resistance is seen at the level of $355.24.

Weekly Pivot Points:

WR3 - $426.36

WR2 - $409.08

WR1 - $387.32

Weekly Pivot - $370.45

WS1 - $348.67

WS2 - $331.18

WS3 - $309.49

Trading Recommendations:

The weekly and monthly time frame trend on the ETH/USD pair remains up and there are no signs of trend reversal, so buy orders are preferred in the mid-term. The key mid-term technical support, seen at the level of $364.95 had been violated, but all the dynamic corrections are still being used to buy the dips. The next mid-term target for bulls is seen at the level of $500.

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