ETH Bears to Target Sub-$1,650 on Binance News and Staking Stats

Key Insights:

• On Monday, ethereum (ETH) joined the broader market in negative territory, sliding by 3.38% to end the day at $1,716.
• News of the Commodity Futures Trading Commission suing Binance weighed on investor sentiment.
• The technical indicators turned more bearish, bringing sub-$1,650 into view.

Ethereum (ETH) slid by 3.38% on Monday. Reversing a 1.83% gain from Sunday, ETH ended the day at $1,716. The bearish session sent ETH to sub-$1,700 for the first time since March 17.

A bullish start to the day saw ETH rise to an early high of $1,782. Falling short of the First Major Resistance Level (R1) at $1,804, ETH fell to a mid-afternoon low of $1,688. ETH fell through the First Major Support Level (S1) at $1,744 and briefly through the Second Major Support Level (S2) at $1,713 before ending the day at $1,716.

News of the CFTC Filing Charges Against Binance Weighed

On Monday, the Commodity Futures Trading Commission (CFTC) sent ETH and the broader crypto market into negative territory. The CFTC filed charges against Binance.

According to the Monday Court filing,

“Beginning no later than July 2019 and continuing through the present, Binance, under Zhao’s direction and control and with Lim’s willful and substantial assistance, has solicited and accepted orders, accepted property to margin, and operated a facility for the training of futures, options, swaps, and leveraged retail commodity transactions involving digital assets that are commodities including bitcoin (BTC), ether (ETH), and litecoin (LTC) for persons in the United States.”

Binance CEO CZ responded to the filing, saying,

“Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint.”

A move against Binance was likely following a letter from US lawmakers to Binance in early March. The letter drew attention to illegal activity and sanction evasion, stating,

“Meanwhile, what little information about Binance’s finances is available to the public suggests that the exchange is a hotbed of illegal financial activity that has facilitated over $10 billion in payments to criminals and sanctions evaders.”

Notably, the filing preceded a hearing on Capitol Hill to investigate the reasons behind the collapse of Silicon Valley Bank and Signature Bank.

The rising hopes of a Ripple victory in the SEC v Ripple case provided late support, while investors brushed aside easing fears of a banking sector crisis.

Pre-Shapella ETH Staking Movements are Price Bearish

ETH staking inflows remained at sub-10,000 for a second consecutive session on Monday, a bearish signal. According to CryptoQuant, staking inflows rose from 8,640 ETH on Sunday to 9,184 on Monday. A period of sub-10,000 ETH inflows could signal unstakers outstripping stakers after the Shapella update.

The total value staked also declined further on Monday. While a decline is not uncommon, an extending downward trend would be a bearish signal.

The Day Ahead

Binance and the SEC v Ripple case will likely be the investor focal points today. Following the CFTC move, progress toward a Ripple victory against the SEC would ease market tensions.

However, investors should monitor Coinbase (COIN)-related news.

This afternoon, US economic indicators and the Federal Reserve will also draw interest. US consumer confidence figures will be in focus. With banking sector jitters easing, talk of a credit crunch could test buyer appetite.

The Committee on Banking, Housing, and Urban Affairs will meet in an open session to conduct a hearing on “Recent Bank Failures and the Federal Regulatory Response.”

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.06% to $1,715. A range-bound start to the day saw ETH rise to an early high of $1,728 before falling into the red.

Technical Indicators

ETH needs to move through the $1,729 pivot to target the First Major Resistance Level (R1) at $1,769 and the Monday high of $1,782. A return to $1,750 would signal a breakout session. However, the crypto news wires should be ETH-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,823 and resistance at $1,850. The Third Major Resistance Level (R3) sits at $1,917.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,675 in play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$1,600. The Second Major Support Level (S2) at $1,635 should limit the downside. The Third Major Support Level (S3) sits at $1,541.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bearish signal. Ethereum sat below the 100-day EMA, currently at $1,722. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through the 100-day EMA ($1,722) would support a breakout from the 50-day EMA ($1,751) and R1 ($1,769) to target R2 ($1,823) and $1,850. However, failure to move through the 50-day EMA ($1,751) would give the bears a run at the 200-day EMA ($1,677) and S1 ($1,675). A move through the 50-day EMA would send a bullish signal.