ETH Bulls to Retarget $2,000 on US Inflation and Staking Inflows

Key Insights:

• On Thursday, ETH extended the winning streak to three sessions, rising by 2.25% to end the day at $1,909.
• US corporate earnings and staking statistics supported the bullish session.
• The technical indicators are bullish, signaling a return to $2,000.

Ethereum (ETH) rose by 2.25% on Thursday. Following a 0.05% gain on Wednesday, ETH ended the day at $1,909. Significantly, ETH held onto the $1,900 handle for the first time since April 20.

A bullish start to the day saw ETH rise from a first-hour low of $1,862 to an early morning high of $1,940. However, falling short of the First Major Resistance Level (R1) at $1,959, ETH fell to sub-$1,870 before finding afternoon support. ETH revisited the $1,938 handle before easing back to end the day at $1,909.

US Corporate Earnings and ETH Staking Statistics Deliver Support

It was a busy Thursday session. The US economic indicators and corporate earnings were in focus.

The US economy expanded by 1.1% in Q1 versus a forecasted 2.0%. In Q4, the economy grew by 2.6%. Despite the weaker-than-expected numbers, the bets on a 25-basis point Fed interest rate hike in May increased from 72.2% to 87.7% over 24 hours and from 84.5% one week earlier.

Tight labor market conditions continued to fuel bets of a May hike, with initial jobless claims falling from 246k to 230k.

US corporate earnings delivered late support, allowing investors to brush aside the GDP numbers.

The markets continued to respond to Meta Platforms (META) earnings results, with Amazon.com (AMZN) providing late support after beating analyst forecasts.

Staking statistics and the withdrawal profile were also ETH-positive.

According to CryptoQuant, staking fell from 103,712 ETH on Wednesday to 89,728 on Thursday. Despite the fall to sub-100,000, staking inflows remained elevated.

Total value-staked soared higher, delivering a bullish price signal.

While the staking statistics delivered ETH price support, the withdrawal profile was more bearish. Projections point to higher ETH principal withdrawals versus reward withdrawals. However, ETH withdrawals overnight fell to negligible levels, with the ETH projections signaling more modest ETH withdrawals for the day ahead.

According to TokenUnlocks, total pending withdrawals stood at 0.624 million ETH, equivalent to approximately $1.20 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 Thursday, withdrawals totaled 6,600 versus 116,810 in deposits, giving a net staking balance of 110,210 ETH.

The Day Ahead

Staking statistics and the withdrawal profile actuals and projections will remain a focal point. A rise in staking inflows and a continued surplus between deposits and withdrawals would be ETH-positive.

Looking beyond the staking statistics, US economic indicators and corporate earnings will move the dial. US Core PCE Price Index, personal spending, and income will provide direction. Softer inflationary pressure would support a less hawkish Fed.

While events in the US will provide direction, SEC v Ripple case updates and Binance and Coinbase (COIN)-related news will also influence. Regulatory risk remains a crypto headwind amidst increased US lawmaker and US government scrutiny.

Ethereum Price Action

At the time of writing, ETH was up 0.29% to $1,914. A range-bound start to the day saw ETH fall to an early low of $1,903 before steadying.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to avoid the $1,904 pivot to target the First Major Resistance Level (R1) at $1,945. A move through the Thursday high of $1,940 would signal a breakout session. However, staking statistics, US stats, and corporate earnings must support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,982 and resistance at $2,000. The Third Major Resistance Level (R3) sits at $2,060.

A fall through the pivot would bring the First Major Support Level (S1) at $1,867 into play. However, barring another crypto market sell-off, ETH should avoid sub-$1,800. The Second Major Support Level (S2) at $1,826 should limit the downside. The Third Major Support Level (S3) sits at $1,748.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. Ethereum sat above the 100-day EMA, currently at $1,911. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 100-day ($1,911) would support a breakout from R1 ($1,945) to target R2 ($1,982) and $2,000. However, a fall through the 100-day ($1,911) and 50-day ($1,898) EMAs would bring the 200-day EMA ($1,880) and S1 ($1,867) into view. A fall through the 50-day EMA would send a bearish signal.