Technical Analysis of ETH/USD for October 28, 2020

Crypto Industry Outlook:

The Chinese central bank, the People's Bank of China (PBOC), has released a bill that aims to provide a regulatory framework and legitimacy for the central bank's future digital currency (CBDC), the digital yuan.

The bill stipulates that the yuan is the official currency of the People's Republic of China, in both physical and digital form.

The bill also appears to address third party efforts to target yuan-based digital currencies by stating that individuals and institutions are not allowed to produce and issue a currency that is intended to 'replace' the digital yuan circulation. This move is likely to criminalize all non-state sanctioned yuan-based stablecoins.

Criminal measures against violators of this proposed law are strict: first of all, confiscating all profits, destroying all tokens and imposing a fine of no less than five times the illegal amount, and the possibility of criminal prosecution and imprisonment.

The People's Bank of China explained that the draft of the new law is open for public consultation until November 23, 2020.

Previous reports indicated that China hopes to start officially issuing digital yuan ahead of the Beijing Winter Olympics in February 2022. In addition, earlier this month, China conducted a major digital payment system test in Shenzhen, with nearly 47,500 residents taking away 200 yuan ($ 30). ) in digital currency, which they then spent in 3,389 stores across the city.

Technical Market Outlook:

After the ETH/USD pair had broken below the support at the level of $394.85 and hit the 61% Fibonacci retracement seen at the level of $385.68, the bulls reacted quickly and managed to bounce back above $400. The local high was made at the level of $408.45, just above the key short-term technical resistance seen at the level of $407.03. The trend line resistance is still a problem for bulls, but if it is finally broken, then the next target for bulls is seen at the level of $414.11 and $416.71. The intraday technical support is located at $400.

Weekly Pivot Points:

WR3 - $490.39

WR2 - $455.51

WR1 - $435.03

Weekly Pivot - $398.88

WS1 - $379.21

WS2 - $342.87

WS3 - $323.39

Trading Recommendations:

The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $500, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $309.61 is broken.

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