ETH Bulls Eye a Return to $1,950 on an Improving Withdrawal Profile

Key Insights:

• On Friday, ETH ended a three-day winning streak, falling by 0.84% to end the day at $1,893.
• Withdrawal data and US economic indicators overshadowed bullish staking statistics to leave ETH in the red.
• The technical indicators are turning bearish, signaling a return to $1,850.

Ethereum (ETH) fell by 0.84% on Friday. Partially reversing a 2.25% gain from Thursday, ETH ended the day at $1,893. Despite the bearish session, ETH avoided sub-$1,850 for a second consecutive session.

A bullish start to the day saw ETH rise to a mid-morning high of $1,925. However, falling short of the First Major Resistance Level (R1) at $1,945, ETH fell to a late afternoon low of $1,875. Steering clear of the First Major Support Level (S1) at $1,867, ETH revisited the $1,900 handle before easing back to end the day at $1,893.

US Recessionary Fears and Staked Withdrawals Deliver a Bearish Session

It was a busy Friday session. The US economic calendar and corporate earnings were in focus.

US inflation and personal spending figures weighed on riskier assets. The Core PCE Price Index increased by 4.6% in March year-over-year versus 4.7% in February. Economists forecast inflation to soften to 4.5%. However, personal spending stalled in March, refueling recessionary fears on persistent inflation and the Fed policy outlook.

According to the CME FedWatch Tool, there is an 80.2% chance of a 25-basis point interest rate hike next week, down from 83.9% over 24 hours. However, the probability of a 25-basis point interest rate hike in June slipped from 26.8% to 19.5%.

Amazon.com (AMZN) added to the bearish sentiment, warning that its cloud business growth could slow further in response to businesses tightening their purse strings. Amazon.com fell by 3.98% on Friday.

However, the US banking sector delivered late support on the news that First Republic Bank (FRC) was heading for receivership. FRC tumbled 43.3% in regular trading hours and 33.62% in after-hours trading.

Staking statistics and the withdrawal profile also contributed to the bearish session, though the withdrawal profile improved for the day ahead.

According to CryptoQuant, staking fell from 89,728 ETH on Thursday to 76,096 on Friday. Despite the fall to sub-100,000, staking inflows remained elevated relative to historic levels.

Total value-staked continued to soar higher, delivering a bullish price signal.

While the staking statistics delivered ETH price support, the withdrawal profile was more bearish. An overnight spike in principal ETH withdrawals was bearish. However, the projections signal a pullback in ETH withdrawals, suggesting a positive net staking balance at current ETH staking levels.

According to TokenUnlocks, total pending withdrawals stood at 0.476 million ETH, equivalent to approximately $0.902 billion. Significantly, the withdrawal profile turned bullish for the day ahead, with projections pointing to a downward trend in principal ETH withdrawals.

Staking inflows continue to outmuscle withdrawals, supporting an ETH return to $2,000. On Friday, withdrawals totaled 9,150 versus 95,340 in deposits, giving a net staking balance of 86,190 ETH.

The Day Ahead

ETH staking statistics and the withdrawal profile actuals and projections will continue to influence. A rise in ETH staking inflows and a continued surplus between deposits and withdrawals would remain ETH-positive.

Beyond the staking statistics, the crypto news wires will also influence.

SEC v Ripple case chatter and Binance and Coinbase (COIN)-related news will need consideration. Regulatory risk SEC remains a crypto headwind amidst increased US lawmaker and US government scrutiny, leaving ETH and the broader crypto market exposed to an SEC-fueled sell-off.

Ethereum Price Action

At the time of writing, ETH was up 0.28% to $1,898. A range-bound start to the day saw ETH fall to an early low of $1,887 before rising to a high of $1,899.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to avoid a fall through the $1,898 pivot to target the First Major Resistance Level (R1) at $1,920 and the Friday high of $1,925. A return to $1,900 would signal a breakout session. However, ETH staking statistics and the broader crypto market must support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,948 and resistance at $1,950. The Third Major Resistance Level (R3) sits at $1,998.

A fall through the pivot would bring the First Major Support Level (S1) at $1,870 into play. However, barring another crypto market sell-off, ETH should avoid sub-$1,800. The Second Major Support Level (S2) at $1,848 should limit the downside. The Third Major Support Level (S3) sits at $1,798.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bearish signal. Ethereum sat at the 50-day EMA, currently at $1,898. The 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A breakout from the 50-day ($1,898) and 100-day ($1,910) EMAs would support a move through R1 ($1,920) to target R2 ($1,948). However, a fall through the 50-day ($1,898) and the 200-day ($1,881) EMAs would bring S1 ($1,870) into view. A fall through the 50-day EMA would send a bearish signal.