Technical Analysis of ETH/USD for June 1, 2021

Crypto Industry News:

During the spring meeting of the International Financial Forum 2021 (IFF), Yao Qian, head of the science and technology oversight office at the China Securities Regulatory Commission (CSRC), said the central bank's digital currency (CBDC) could operate directly on the Ethereum network.

When mentioning the operational architecture of potential infrastructure solutions for CBDC, the official added that, apart from Ethereum, CBDC could be supported, for example, by the Facebook payment system Diem.

"We can imagine that if a central bank's digital currency operates directly on blockchain networks such as Ethereum and Diem, then the central bank could use BaaS services to directly deliver central bank digital currency to users without the use of intermediaries."

Overall, Yao outlined seven aspects that he believes should be taken into account when researching and developing CBDC. It's about its technical path, value attributes, operational architecture, interest charging, distribution, smart contract implementation, and regulatory issues. The official noted that digital currency cannot be a "simple simulation" of physical money, which justifies the creation of "smart money".

However, he also drew attention to the gaps in the security of smart contracts. Technology has to mature, he said.

Technical Market Outlook:

The ETH/USD pair has broken through the upper channel line around the level of $2,505 and tested the local technical resistance seen at $2,638. Nevertheless, as long as the price is still under the level of $2,914, the bears are still in full control of the market and the next target for bears is seen at the level of $1,729, $1,633 and $1,544. The nearest technical support is still seen at the level of $2,201.

Weekly Pivot Points:

WR3 - $4,688

WR2 - $4,131

WR1 - $2,922

Weekly Pivot - $2,341

WS1 - $1,141

WS2 - $579

WS3 - $181

Trading Recommendations:

Ethereum has lost more than 50% of the recent gains from the lows of March 2020 and now is currently in the counter-trend corrective cycle. The next long-term target for bears is seen at the level of $1,728 (61% Fibonacci retracement of the last wave up) and $1,420 ( January 2018 swing high). The up trend is resumed when the level of min. $3,000 is clearly violated.

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The material has been provided by InstaForex Company - www.instaforex.com

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