ETH Bulls to Retarget $1,850 as Staking Inflows Surge

Key Insights:

• On Wednesday, ethereum (ETH) slid by 3.76% to end the day at $1,739.
• ETH staking inflows failed to support a breakout session, with Fed Chair Powell and the SEC weighing on investor sentiment.
• However, the technical indicators remained bullish, leaving $2,000 in view.

Ethereum (ETH) slid by 3.76% on Wednesday. Reversing a 3.91% loss from Tuesday, ETH ended the day at $1,739. ETH avoided sub-$1,700 for the fifth consecutive session despite the mid-week sell-off.

After a choppy morning, ETH rose to a mid-afternoon high of $1,824 before hitting reverse. Falling short of the First Major Resistance Level (R1) at $1,857, ETH fell to a post-Fed low of $1,715. ETH fell through the First Major Support Level (S1) at $1,741 to wrap up the day at $1,739.

Fed Chair Powell and the NASDAQ Composite Index Send ETH South

The Federal Reserve raised interest rates by 25 basis points on Wednesday. While aligned with market expectations, the FOMC Projections and Fed Chair Powell weighed on riskier assets.

The FOMC projections showed an upward revision to the median Federal Funds Rate to 4.3% for 2024, while the median for 2023 at 5.1% was unchanged.

A change in forward guidance was insufficient to provide price support. Powell discussed the possible influences of the banking sector on monetary policy, saying,

“We no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation. Instead, we now anticipate that some additional policy firming may be appropriate.”

However, Powell reiterated the commitment to bring inflation to target, which was enough to send ETH deep into negative territory.

The NASDAQ Composite Index fell by 1.60% on Wednesday, with the Dow and S&P 500 seeing losses of 1.63% and 1.65%, respectively. This morning, the NASDAQ mini was up 22.25 points.

ETH staking inflows rebounded on Wednesday. According to CryptoQuant, staking inflows jumped from 9,248 ETH on Tuesday to 32,640 ETH on Wednesday, the highest ETH staking inflows since March 9 (35,552 ETH).

The rebound maintained the upward trend in staking inflows ahead of the April Shapella upgrade. Significantly, the upward trend suggests a bullish response to the Shapella upgrade, with total ETH value staked also rising.

A downward trend would suggest a jump in unstaking requests upon completion of the Shapella upgrade.

The Day Ahead

This afternoon, US economic indicators will test buyer appetite. Initial jobless claims will be in focus, with sub-200k levels supporting a more hawkish Fed. With the Fed acknowledging the influence of the banking sector on monetary policy, we should see less ETH price sensitivity to the numbers.

However, updates from the ongoing SEC v Ripple case and crypto exchange-related news will provide direction. Binance and Coinbase (COIN) are currently under the watchful eye of regulators.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.01% to $1,739. A range-bound start to the day saw ETH rise to an early high of $1,750 before easing back.

Technical Indicators

ETH needs to move through the $1,759 pivot to target the First Major Resistance Level (R1) at $1,804 and the Wednesday high of $1,824. A return to $1,800 would signal a breakout session. However, US economic indicators and the crypto news wires should be market-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,868 and resistance at $1,900. The Third Major Resistance Level (R3) sits at $1,977.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,695 in play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$1,650. The Second Major Support Level (S2) at $1,650 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 mixed signal. Ethereum sat below the 50-day EMA, currently at $1,739. The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, delivering mixed signals.

A move through the 50-day EMA ($1,739) would support a breakout from R1 ($1,804) to target R2 ($1,868) and $1,900. However, failure to move through the 50-day EMA ($1,739) would give the bears a run at S1 ($1,695) and the 100-day EMA ($1,691). A move through the 50-day EMA would send a bullish signal.