ETH Eyes a Return to $1,900 as Focus Turns to US Hearing on Digital Assets

Key Insights:

• On Monday, ETH rejoined the broader crypto market, falling 4.33% to end the day at $1,811.
• The SEC, US economic indicators, staking inflows, and the withdrawal profile weighed on investor sentiment.
• The technical indicators turned bearish, signaling a fall to sub-$1,700.

Ethereum (ETH) slid by 4.33% on Monday. Following a 0.16% fall on Sunday, ETH ended the day at $1,811. The bearish session led ETH to sub-$1,800 for the first time since May 26.

Bearish throughout the Monday session, ETH fell from a first-hour high of $1,891 to a late afternoon low of $1,777. ETH fell through the Major Support Levels to end the session at $1,811.

SEC and Staking Statistics Send ETH to Sub-$1,800 Levels

News of US regulators suing Binance, Binance US, and CEO CZ sent ETH and the crypto market into the deep red. There are thirteen charges against Binance, CZ, and Binance US. Charges include the unregistered offer and sale of securities and the misrepresenting trading controls and oversight on the Binance.US platform.

SEC Chair Gary Gensler had this to say,

“Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.”

However, staking statistics and the withdrawal profile were also bearish.

According to CryptoQuant, staking inflows increased from 22,272 ETH on Sunday to 79,424 on Monday. While staking inflows recovered from the Sunday low, inflows remained below the 100,000 mark and recent highs.

The total value staked rose at a more marked pace. An uptrend in ETH staking inflows supported the rise in the value staked.

The overnight withdrawal profile was bearish, with principal withdrawals above normal levels. However, withdrawal projections for the morning session were bullish, with principal ETH withdrawals projected to fall below normal levels.

On Monday, the net ETH staking balance tumbled by 94.93% to a surplus of 2,750 ETH, equivalent to $5.23 million. Deposits totaled 23,590 ETH versus withdrawals of 20,840 ETH.

According to TokenUnlocks, total pending withdrawals stood at 19,130 ETH, equivalent to approximately $34.73 million. Notably, the staking APR stood at 7.09%, down 14.27% over 24 hours.

The news of the SEC filing a lawsuit against Binance, Binance CEO CZ, and Binance US contributed to the sharp decline in the net staking surplus and staking APR.

The Day Ahead

It is a quieter Tuesday for ETH. There are no US economic indicators to influence the afternoon. The lack of stats will leave staking inflows and the withdrawal profile to provide direction. Another fall in staking inflows would weigh on buyer appetite.

While staking statistics will influence, US lawmakers will also be in the spotlight. The US Committee on Agriculture will hold a hearing focusing on the spot trading of digital assets. With the latest SEC move against the digital asset space, we expect the hearing to garner plenty of interest.

However, investors should continue to track the crypto news wires for SEC v Ripple updates and Binance and Coinbase (COIN)-related news.

Ethereum Price Action

This morning, ETH was up 0.22% to $1,815. A mixed start to the day saw ETH fall to an early low of $1,803 before rising to a high of $1,820.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to move through the $1,826 pivot to target the First Major Resistance Level (R1) at $1,876 and the Monday high of $1,891. A return to $1,850 would signal a breakout session. However, ETH staking statistics and the crypto news wires must support a bullish session.

In the event of an extended rally, the bulls would likely test resistance at $1,900 but fall short of the Second Major Resistance Level (R2) at $1,940. The Third Major Resistance Level (R3) sits at $2,054.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,762 in play. However, barring another risk-off-fueled sell-off, ETH should avoid sub-$1,700. The Second Major Support Level (S2) at $1,712 should limit the downside.

The Third Major Support Level (S3) sits at $1,598.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 200-day EMA, currently at $1,855. The 50-day EMA narrowed to the 100-day EMA, with the 100-day EMA closing in on the 200-day EMA, delivering bearish signals.

A move through the 200-day ($1,855) and 100-day ($1,859) EMAs would support a breakout from the 50-day ($1,867) to target R1 ($1,876) and $1,900. However, failure to move through the 200-day EMA ($1,855) would leave S1 ($1,762) in view.

A move through the 50-day EMA would send a bullish signal.