Ethereum’s native token, Ether (ETH), experienced a surge in price on March 13th following U.S. authorities’ emergency measures to restore confidence in the banking sector. The move came in response to the shutdown of Silicon Valley Bank (SVB) and Signature Bank, which had caused depositor panic and fears of wider banking contagion. The U.S. Treasury Department, Federal Reserve, and Federal Deposit Insurance Corp. reassured depositors that they would get their money back and promised to launch a new $25 billion Bank Term Funding Program to offer short-term loans to banks. These measures helped to stabilize the market and restore confidence, with Ether rising over 3% to around $1,635, its highest level in almost two weeks.
The March 10th selloff took the ETH price closer to the technical downside target of $1,250, but the bears missed the target by a whopping $100. Two potential hints of a short-term uptrend emerged from this selloff: the March 10th candlestick appeared like a Dragonfly Doji, which signifies bullish rejection, and the price bounced after Ether’s daily relative strength index (RSI) dropped to 31, just one point above the oversold threshold. 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.
Looking ahead, the ETH price could rally to $1,720 by the end of March, up almost 8% from current price levels, or it 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 a pullback after hitting the resistance line of its prevailing symmetrical triangle. If ETH starts correcting from its current price levels, the next stop is likely to be the triangle’s support line, bringing the $1,250 downside target back into the picture.
Additionally, Binance announced its $1 billion Industry Recovery Initiative fund would be converted to Bitcoin, Ether, and Binance Coin (BNB), which may also have contributed to the recent price surge. Overall, while short-term measures by U.S. authorities have improved the outlook for Ethereum, the long-term picture remains uncertain, with potential downside risks still present.