ETH Eyes $1,700 on ETH Staking Inflows ahead of Shanghai Upgrade

Key Insights:

• It was a bullish Sunday session for bitcoin (BTC) and ethereum (ETH), with ETH revisiting $1,650.
• ETH staking figures delivered a bullish session, with dip buyers supporting the broader crypto market.
• However, ETH and BTC made modest gains this morning.

Ethereum (ETH) rose by 2.88% on Sunday. Reversing a 0.81% loss from Saturday, ETH ended the week down 2.31% to $1,641.

A mixed start to the day saw ETH fall to an early low of $1,588. Steering clear of the First Major Support Level (S1) at $1,566, ETH rallied to a late high of $1,652. ETH broke through the First Major Resistance Level (R1) at $1,617 and the Second Major Resistance Level (R2) at $1,638 to end the day at $1,641.

On Sunday, bitcoin (BTC) rose by 1.65%. Reversing a 0.09% loss from Saturday, BTC ended the week down 2.98% to $23,561. BTC ended the five-day losing streak while falling short of the $24,000 handle for the second consecutive session.

A mixed start to the day saw BTC fall to an early morning low of $23,083. Steering clear of the First Major Support Level (S1) at $22,918, BTC rallied to a late high of $23,673 before easing back. BTC broke through the First Major Resistance Level (R1) at $23,331 and the Second Major Resistance Level (R2) at $23,483 to end the day at $23,561. The Third Major Resistance Level (R3) at $23,619 capped the upside.

Tron Founder Justin Sun Delivered a Bullish ETH Session

On Saturday, news of Tron (TRX) founder Justin Sun staking 150,100 ETH on Lido (LDO) delivered ETH price support. Justin Sun made the stake ahead of the Shapella upgrade set to occur at 04:04:47 UTC on February 28, after which validators can withdraw their staked ETH on the Beacon Chain.

Significantly, ETH staking inflows on Saturday reached 198,560 ETH, the highest of the year.

According to CryptoQuant, staking levels remained higher on Sunday, with inflows of 71,456 ETH, the second highest of 2023, signaling support for the Shapella upgrade and bullish ETH price action.

Market reaction to the latest ETH staking inflow numbers muted investor jitters over the Fed and regulatory risk.

Updates from the G20 delivered regulatory uncertainty, with the G20 tasking the Bank for International Settlements (BIS), the Financial Stability Board (FSB), and the International Monetary Fund (IMF) to initiate a global regulatory framework.

The G20’s decision to move ahead with a global regulatory framework rather than pursue a ban on cryptos was market positive. However, the involvement of the IMF in establishing a global crypto regulatory framework could be of concern. At the G20, IMF Managing Director suggested banning crypto should be an option.

The Day Ahead

US regulatory activity and US lawmaker chatter will need continued monitoring. Investors should also track the crypto news wires for Binance and FTX updates and SEC v Ripple news that could move the dial.

In the afternoon session, US economic indicators, Fed chatter, and the NASDAQ Composite Index will also provide direction. Fed chatter will likely have more impact on buyer appetite as investors look for further reaction to the latest US inflation numbers. The NASDAQ mini was up 38 points this morning.

For ETH, investors should continue tracking Shanghai upgrade news. Talk of a delay to the upgrade would be ETH negative.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.05% to $1,642. A range-bound start to the day saw ETH rise to an early high of $1,650 before easing back.

Technical Indicators

ETH needs to avoid the $1,627 pivot to target the First Major Resistance Level (R1) at $1,666. A move through the Sunday high of $1,652 would signal a breakout session. However, Shanghai hard fork updates and the crypto news wires should be ETH-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,691 and resistance at $1,700. The Third Major Resistance Level (R3) sits at $1,755.

A fall through the pivot would bring the First Major Support Level (S1) at $1,602 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,550. The Second Major Support Level (S2) at $1,563 should limit the damage. The Third Major Support Level (S3) sits at $1,499.

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 $1,633. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($1,633) would support a breakout from R1 ($1,666) to give the bulls a run at R2 ($1,691) and $1,700. However, a fall through the 50-day (1,633) and 100-day ($1,629) EMAs would give the bears a run at S1 ($1,602) and the 200-day EMA ($1,598). A fall through the 50-day EMA would send a bearish signal.

Bitcoin (BTC) Price Action

This morning, BTC was up 0.07% to $23,577. A mixed start to the day saw BTC fall to an early low of $23,450 before rising to a high of $23,643.

Technical Indicators

BTC needs to avoid the $23,439 pivot to target the First Major Resistance Level (R1) at $23,795. A move through the Sunday high of $23,673 would signal a breakout session. The crypto news wires and Fed chatter should be crypto-friendly to support an extended rally.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $24,029. The Third Major Resistance Level (R3) sits at $24,619.

A fall through the pivot would bring the First Major Support Level (S1) at $23,205 into play. However, barring another Fed-fueled crypto sell-off, BTC should avoid sub-$22,500. The Second Major Support Level (S2) at $22,849 should limit the downside.

The Third Major Support Level (S3) sits at $22,259.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. BTC sat above the 100-day EMA ($23,530). The 50-day EMA flattened on 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 ($23,667) would support a breakout from R1 ($23,795) to target R2 ($24,029). However, a fall through the 100-day EMA ($23,530) and S1 ($23,205) would give the bears a run at the 200-day EMA ($22,886) and S2 ($22,849). A move through the 50-day EMA ($23,663) would send a bullish signal.