ETH Eyes a Return to $1,850 to Target $1,900 Ahead of Fed Chatter

Key Insights:

• On Sunday, ETH ended the day in positive territory, gaining 0.22% to wrap up the day at $1,800.
• Easing US debt ceiling jitters delivered support while staking statistics and the withdrawal profile limited the upside.
• However, the technical indicators remained bearish, signaling a return to sub-$1,700.

Ethereum (ETH) rose by 0.22% on Sunday. Partially reversing a 0.66% loss from Saturday, ETH ended the week down 3.91% to $1,800. Significantly, ETH rose for the second time in nine sessions while falling short of the $1,850 handle for the fourth consecutive session.

A mixed start to the day saw ETH fall to a first-hour low of $1,791. Steering clear of the First Major Support Level (S1) at $1,782, ETH rose to a mid-afternoon high of $1,825. ETH broke through the First Major Resistance Level (R1) at $1,813 before easing back to end the day at $1,800.

Staking Statistics and the Withdrawal Profile Cap the Upside

According to CryptoQuant, staking inflows tumbled from 81,632 ETH on Saturday to 45,472 on Sunday. Sunday inflows fell to the lowest in May, with Sunday inflows historically lower than mid-week levels.

The total value staked continued rising despite the fall in ETH staking inflows, with an ETH return to $1,800 delivering support. While inflows fell below 50,000 levels, inflows remained higher than historical Sunday trends.

Overnight, the withdrawal profile was bearish. Principal withdrawals climbed to above-normal levels. Withdrawal projections for the morning session were less bearish, with principal ETH withdrawals projected to trend lower.

The spike in principal withdrawals coincided with another sharp fall in staking inflows, a bearish combination. On Sunday, the net ETH staking balance fell from a surplus of 158,540 ETH surplus to 43,640 ETH, equivalent to $78.60 million. Deposits totaled 97,540 ETH versus withdrawals of 53,900 ETH.

According to TokenUnlocks, total pending withdrawals stood at 29,470 ETH, equivalent to approximately $52.89 million.

While the staking statistics and withdrawal profile were bearish, Ethereum developers resolved the Beacon Chain Finality problems to deliver price support.

On Thursday and Friday, the Ethereum Foundation announced Beacon Chain Finality issues affecting epochs 3 and 8, which could not reach finality for a short period.

Easing fears of a US government default on payments was also good news though policymakers have yet to agree to raise the debt ceiling.

The Day Ahead

Staking statistics and the withdrawal profile will continue to provide direction. A slide in principal withdrawals and a spike in staking inflows would be bullish.

Investors should monitor the crypto news wires throughout the session. SEC v Ripple case-related news will move the dial, with Binance and Coinbase (COIN) also areas of interest.

However, the US economic calendar will influence the afternoon.

NY Empire State Manufacturing Index numbers for May will be in focus this afternoon. Economists forecast a fall from 10.8 to -2.5. An Index return to negative territory would fuel recessionary jitters and weigh on BTC and the broader crypto market.

While the stats will draw interest, investors should monitor FOMC member speeches. FOMC members Kashkari, Bostic, and Barkin will speak today. Hawkish chatter would be bearish as investors search for clues on what is next from the Fed.

According to the CME FedWatch Tool, there was a 14.4% chance of a 25-basis point interest rate hike in June, down from 15.5% on Friday.

Ethereum Price Action

At the time of writing, ETH was down 0.24% to $1,796. A bearish start to the day saw ETH fall from an early high of $1,801 to a low of $1,786. This morning, the First Major Support Level (S1) at $1,786 delivered support.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to move through the $1,805 pivot to target the First Major Resistance Level (R1) at $1,820 and the Sunday high of $1,825. A return to $1,810 would signal a breakout session. However, ETH staking statistics and Fed chatter must support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,839 and resistance at $1,850. The Third Major Resistance Level (R3) sits at $1,873.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,786 in play. However, barring another risk-off-fueled sell-off, ETH should avoid sub-$1,750. The Second Major Support Level (S2) at $1,771 should limit the downside. The Third Major Support Level (S3) sits at $1,737.

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 $1,827. The 50-day EMA eased back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

An ETH move through R1 ($1,820) and 50-day EMA ($1,827) would give the bulls a run at R2 ($1,839) and $1,850. However, failure to move through the 50-day EMA ($1,827) would leave S1 ($1,786) in view.

A breakout from the 50-day EMA would send a bullish signal.