Technical Analysis of ETH/USD for January 7, 2021

Crypto Industry News:

Kyrgyzstan's central bank has completed two bills aimed at recognizing and regulating the country's nascent cryptocurrency sector. According to the official announcement, the National Bank of the Kyrgyz Republic announced two laws for public discussion: "On the processing of cryptocurrencies" and "On changes to legal acts in the field of virtual assets". Stakeholders have until February 21 to submit comments and concerns about the regulations.

The proposed legislation aims to recognize cryptocurrency exchanges, indicating that exchanges must be operated by legal entities licensed by the country's central bank. The draft includes reporting requirements aimed at reducing the risk of money laundering and terrorist financing.

There are also laws to protect consumer rights and enforcement actions against fraudsters using virtual currencies. A separate law introduces the concept of "virtual assets" into the Civil Code of the Kyrgyz Republic, identifying cryptographic assets as a subject of civil rights. The act also requires the taxation of services provided by cryptocurrency exchanges. The Kyrgyz central bank announced that it would begin work on draft cryptocurrency legislation on November 13, citing growing national interest in crypto assets.

The Kyrgyz Republic had previously tried to regulate cryptocurrencies by introducing a tax system for miners in August 2019. However, the next month, authorities cut off the industry's access to electricity, claiming it was over-consumed.

Kyrgyzstan's parliament reconsidered introducing a mining tax system in June 2020, as the government looked for new sources of revenue to offset the economic impact of the coronavirus pandemic.

Technical Market Outlook:

The ETH/USD pair has broken through the level of $1,200 and made a new swing high at the level of $1,223. The up trend is being continued and there is no sign of trend reversal. Moreover, the up trend is now going parabolic and the next mid-term target for bulls is seen at the level of $1,420, the all time high from 2017. The nearest technical support is seen at the level of $1,100 and $1,090.

Weekly Pivot Points:

WR3 - $1,394

WR2 - $1,185

WR1 - $1,086

Weekly Pivot - $847

WS1 - $791

WS2 - $545

WS3 - $496

Trading Recommendations:

The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $1,420, so any correction or local pull-back should be used to open the buy orders. Please notice, the up trend starting to go vertical, so the volatility will be higher than average. The bullish scenario is valid as long as the level of $830 is broken.

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