ETH Bulls to Target $2,200 on Staking Inflows and the Gensler Grilling

Key Insights:

• It was a bullish Tuesday session, with ETH rising by 1.40% to end the day at $2,105.
• Staking inflow and withdrawal statistics and a Gary Gensler grilling on Capitol Hill delivered support.
• The technical indicators remain bullish, signaling a run at $2,300.

Ethereum (ETH) rose by 1.40% on Tuesday. Partially reversing a 2.08% loss from Monday, ETH ended the day at $2,105.

A bearish start to the day saw ETH fall to an early low of $2,053. Steering clear of the First Major Support Level (S1) at $2,049, ETH rose to a late morning high of $2,125. ETH broke through the First Major Resistance Level (R1) at $2,113 before returning to sub-$2,100 levels. However, a bullish end to the session saw ETH wrap up the day at $2,105.

Staking Statistics, China Stats, and US Lawmaker Scrutiny Delivered Support

Better-than-expected economic indicators from China delivered a morning boost.

In Q1, the Chinese economy expanded by 2.2% versus 0.6% growth in Q4 2022. The numbers were in line with forecasts. However, year-over-year, the economy expanded by 4.5% versus a forecasted 4.0%. In Q4 2022, the economy grew by 2.9% year-over-year.

Retail sales and industrial production figures also beat forecasts, signaling a positive end to the first quarter.

While the numbers from China supported riskier assets, staking and withdrawal statistics were bullish.

According to CryptoQuant, staking inflows fell from 89,696 ETH on Monday to 81,760. Despite the decline, staking inflows remained elevated, a bullish price signal.

Total value staked figures also delivered bullish signals, rising through Tuesday and this morning.

The post-Shapella Upgrade ETH withdrawals profile and Wednesday projections support delivered a more bullish outlook.

According to TokenUnlocks, total pending withdrawals stood at 0.939 million ETH, equivalent to approximately $1.96 billion. However, ETH withdrawals primarily comprised reward withdrawals, providing morning support. A higher principal withdrawal profile would be a bearish signal.

While the stats send bullish signals, the heavily anticipated digital currency sub-Committee hearing did not disappoint. House Financial Services Committee Chair Patrick McHenry referenced the SEC’s regulation by enforcement mantra, saying,

“Your approach is driving innovation overseas and endangering American competitiveness.”

McHenry also said,

“Regulation by enforcement is not sufficient nor sustainable. You’re punishing digital asset firms for allegedly not adhering to the law when they don’t know it will apply to them.”

The SEC Chair had this to say,

“We have a clear regulatory framework built up over 90 years.”

Talking about the exchanges, Gensler added,

“Just a bunch of intermediaries in this market think they have a choice. They don’t have a choice.”

Significantly, Patrick McHenry, US House Financial Services Committee Chairman, was quick off the blocks, asking whether ETH is a commodity or a security. McHenry demonstrated the lack of clarity that plagues the digital asset space by highlighting the conflicting views of the SEC, the CFTC, and the New York State attorney.

The Day Ahead

Investors should continue monitoring ETH staking statistics. A spike in principal withdrawals would be a bearish signal. Staking inflows and total value staked figures also need to support a bullish session.

Updates from the ongoing SEC v Ripple case and Binance and Coinbase (COIN)-related news will also need consideration.

Investors should also track the crypto news wires for SEC commentary and activity following the hearing on Tuesday.

Ethereum Price Action

At the time of writing, ETH was down 0.59% to $2,092. A mixed start to the day saw ETH rise to an early high of $2,106 before falling to a low of $2,083.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to move through the $2,094 pivot to target the First Major Resistance Level (R1) at $2,136. A move through the Tuesday high of $2,125 would signal a breakout session. However, the crypto news wires and staking statistics need to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $2,166 and resistance at $2,200. The Third Major Resistance Level (R3) sits at $2,238.

Failure to move through the pivot would leave the First Major Support Level (S1) at $2,064 in play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$2,000. The Second Major Support Level (S2) at $2,022 should limit the downside. The Third Major Support Level (S3) sits at $1,950.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. Ethereum sat above the 50-day EMA, currently at $2,039. The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($2,064) and the 50-day EMA ($2,039) would support a breakout from R1 ($2,136) to give the bulls a run at R2 ($2,166) and $2,200. However, a fall through S1 ($2,064) would bring the 50-day EMA ($2,039) and S2 ($2,022) into view. A fall through the 50-day EMA would send a bearish signal.