ETH Bulls Need Progress Toward Debt Ceiling Deal to Target $1,900

Key Insights:

• On Friday, ETH joined the broader crypto market in the green, gaining 0.67% to end the day at $1,813.
• Fed Chair Powell and staking statistics delivered a bullish session, while stalled US debt ceiling talks capped the upside.
• The technical indicators remained bearish, signaling a return to sub-$1,700.

Ethereum (ETH) rose by 0.67% on Friday. Partially reversing a 1.21% loss from Thursday, ETH ended the day at $1,813. Despite the bullish session, ETH fell short of the $1,850 handle for the ninth consecutive session.

A mixed start to the day saw ETH fall to an early morning low of $1,797. Steering clear of the First Major Support Level (S1) at $1,771, ETH rose to a mid-afternoon high of $1,830. Coming up against the First Major Resistance Level (R1) at $1,832, ETH retested support at $1,800 before ending the session at $1,813.

Fed Chair Powell and Staking Statistics Delivered Support

According to CryptoQuant, staking inflows declined from 183,584 ETH on Thursday to 130,208 on Friday. Staking inflows remained elevated compared to recent weekend levels despite the Friday fall.

The total value continued climbing higher, supported by ETH staking inflows and the bullish ETH session.

The withdrawal profile was also bullish. Overnight, principal withdrawals returned to normal levels. Withdrawal projections for the morning session were also bullish, with principal ETH withdrawals expected to remain subdued.

However, a sharp increase in principal withdrawals and a slide in staking inflows would deliver a bearish session. On Friday, the net ETH staking balance surged from a surplus of 104,140 ETH to 216,960 ETH, equivalent to $393.77 million. Deposits totaled 221,240 ETH versus withdrawals of 4,280 ETH.

According to TokenUnlocks, total pending withdrawals stood at 80,400 ETH, equivalent to approximately $145.81 million. Notably, the staking APR stood at 8.79%, unchanged over 24 hours.

While the staking statistics and withdrawal profile were bullish, Fed Chair Powell and US debt ceiling-related news delivered a choppy afternoon session.

Fed Chair Powell gave a less bullish-than-expected speech on monetary policy, easing bets on a June interest rate hike.

While the Fed Chair noted that it remained unclear whether further interest rate hikes are needed, Powell said the aggressive policy moves will allow the Fed to consider the stats and make “more careful assessments.”

According to the CME FedWatchTool, the probability of a 25-basis point June interest rate hike stood at 18.6% on Friday, down from 35.6% on May 18.

However, the news of GOP negotiators halting debt ceiling talks weighed on investor sentiment. The downside was modest, with policymakers saying that talks would resume. Notably, the debt ceiling-related news coincided with Fed Chair Powell’s speech.

The Day Ahead

It is a relatively quiet day for ETH, with US debt ceiling-related news the likely focal point.

However, staking statistics and the withdrawal profile will continue to influence. A further rise in ETH staking inflows and a wider net staking surplus would support a bullish session.

Investors should continue to monitor the crypto news wires for SEC v Ripple chatter, with Binance and Coinbase (COIN) also in the spotlight.

Ethereum Price Action

This morning, ETH was down 0.17% to $1,807. A range-bound start to the day saw ETH rise to an early high of $1,814 before falling to a low of $1,807.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to move through the $1,813 pivot to target the First Major Resistance Level (R1) at $1,830. A return to $1,830 would signal a breakout session. However, ETH staking statistics and US debt ceiling updates must support a bullish session.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,846 and resistance at $1,850. The Third Major Resistance Level (R3) sits at $1,879.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,797 in play. However, barring a risk-off-fueled sell-off, ETH should avoid sub-$1,750. The Second Major Support Level (S2) at $1,780 should limit the downside. The Third Major Support Level (S3) sits at $1,747.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 50-day EMA, currently at $1,818. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through the 50-day EMA ($1,818) would support a breakout from R1 ($1,830) and 100-day EMA ($1,835) to target R2 ($1,846) and the 200-day EMA ($1,850). However, failure to move through the 50-day EMA ($1,818) would leave S1 ($1,797) in view.

A move through the 50-day EMA would send a bullish signal.