ETH Bears to Target Sub-$1,800 as Mood Turns Bearish

Key Insights:

• ETH tracked the broader market on Friday, gaining 1.24% to end the day at $1,871.
• Staking statistics and US economic indicators provided support.
• However, the technical indicators remained bearish, signaling a return to sub-$1,800.

Ethereum (ETH) rose by 1.24% on Friday. Partially reversing a 3.30% loss from Thursday, ETH ended the day at $1,871. Despite the bullish session, ETH fell short of the $1,900 handle for the first time in seven sessions.

Ethereum Price Action

This morning, ETH was down 0.11% to $1,869. A mixed start to the day saw ETH rise to an early high of $1,874 before falling to a low of $1,868.

Daily Chart

The Daily Chart showed ETH/USD remained below the lower level of the $1,930 – $1,900 resistance band while holding above the 50-day EMA ($1,851).

ETH/USD currently sits above the 50-day ($1,851) and 200-day ($1,755) EMAs, signaling bullish momentum over the near and long term.

Notably, the 50-day EMA widened from the 200-day EMA and reflected bullish momentum.

Looking at the 14-Daily RSI, the 50.59 reading signaled a bullish outlook and aligned with the 50-day EMA, supporting a run at the lower level of the $1,930 – $1,900 resistance band.

4-Hourly Chart

However, looking at the 4-Hourly Chart, the ETH/USD faces strong resistance at the $1,900 psychological level. ETH/USD sits below the 50-day EMA ($1,899) but above the 200-day EMA ($1,860), sending bearish near-term and bullish longer-term signals.

Significantly, the 50-day EMA narrowed to the 200-day EMA, signaling a likely return to sub-$1,800 to bring the $1,665 – $1,625 support band into view.

ETH/USD should move through the 50-day EMA ($1,899) and the lower level of the resistance band to support a breakout from $1,930.

The 14-4H RSI reading of 40.22 indicates a bearish stance, with selling pressure outweighing buying pressure. Significantly, the bearish RSI aligns with the EMAs and supports a return to sub-$1,800.

Staking Statistics Support a Bullish Outlook on Staking Inflows

According to CryptoQuant, staking inflows increased from 48,096 ETH on Thursday to 65,536 on Friday. While ETH staking inflows remained below the all-important 100,000 ETH threshold, the Friday inflows reached a weekly high.

The overnight withdrawal profile was relatively bullish, with principal withdrawals mostly at normal levels. However, withdrawal projections for the morning session are bullish. Projections show ETH withdrawal levels will sit at below-normal levels throughout the morning.

On Friday, the net ETH staking balance stood at a 31,530 ETH surplus (+4.70%) over 24 hours, equivalent to a positive balance of $60.02 million. Deposits totaled 48,790 versus withdrawals of 17,260 ETH.

According to TokenUnlocks, total pending withdrawals stood at 39,430 ETH, equivalent to approximately $73.74 million. Notably, the staking APR stood at 5.61%, unchanged over 24 hours. However, the downward trend in the staking APR remains a drag for staking inflows and is ETH price negative.

US Economic Indicators Delivered Support Amidst Waning ETF Optimism

It was a busy Friday, with the US Jobs Report providing afternoon support. A relatively modest increase in nonfarm payrolls eased fears of a more hawkish Fed, while wage growth figures supported a July rate hike, with investors penciling one more before the Fed hits the brakes.

ETH failed to retake the $1,900 handle, with the upward trend in the cost of borrowing impacting ETH and the broader crypto market. The pullback in staking APR contributed to the return to sub-$1,900.

Market sentiment toward the ETF applications sitting with the SEC also weighed, with JPMorgan (JPM) pouring cold water on the idea of a surge in institutional money inflows if the SEC approves any or all the ETF filings.

The Day Ahead

It is a quiet Saturday, with no US economic indicators or Fed chatter to move the dial.

With no external market forces to consider, investors should monitor the crypto news wires for price-moving events. Crypto-ETF-related chatter and SEC v Ripple-linked news would influence investor sentiment.

However, with Binance and Coinbase in the SEC’s spotlight, investors should also consider SEC v Binance and SEC v Coinbase (COIN)-related news.