ETH Eyes Sub-$1,750 on President Biden Comments and Debt Ceiling News

Key Insights:

• On Sunday, ETH fell by 0.82% to end the day at $1,805.
• US President Joe Biden and staking statistics weighed on investor sentiment.
• The technical indicators remained bearish, signaling a return to sub-$1,700.

Ethereum (ETH) fell by 0.82% on Sunday. Reversing a 0.39% gain from Saturday, ETH ended the week up 0.29% to $1,805. Significantly, ETH fell short of the $1,850 handle for the eleventh consecutive session.

A bullish start to the day saw ETH rise to a first-hour high of $1,830. Coming up against the First Major Resistance Level (R1) at $1,831, ETH slid to a late-session low of $1,797. ETH fell through the First Major Support Level (S1) at $1,808. However, finding support at the Second Major Support Level (S2) at $1,796, ETH ended the session at $1,805.

US Debt Ceiling News and Staking Statistics Delivered Support

According to CryptoQuant, staking inflows tumbled from 135,776 ETH on Saturday to 93,952 on Sunday. Despite the decline, staking inflows remained elevated compared to recent weekend levels.

The total value continued climbing higher, supported by the net staking balance surplus.

The withdrawal profile was bearish. Overnight, principal withdrawals rose to above-normal levels. However, withdrawal projections for the morning session were more bullish, with principal ETH withdrawals expected to fall to below-normal levels this morning.

However, a sharp increase in principal withdrawals and another slide in staking inflows would deliver a bearish session. On Sunday, the net ETH staking balance fell from a surplus of 153,640 ETH on Saturday to a 145,530 ETH surplus, equivalent to $263.90 million. Deposits totaled 148,550 ETH versus withdrawals of 3,020 ETH.

According to TokenUnlocks, total pending withdrawals stood at 53,580 ETH, equivalent to approximately $159.67 million. Notably, the staking APR stood at 8.98%, up 0.79% over 24 hours.

Beyond the crypto market, US President Joe Biden added to the bearish mood. Discussing the US debt ceiling crisis at the G7, President Biden delivered anti-crypto rhetoric, saying,

“I’m not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistants at risk.”

The anti-crypto rhetoric, and the ongoing threat of a US default, sent the crypto market into the red.

The Day Ahead

It is a busy day for ETH, with US debt ceiling talks being the focal point. Fed chatter will also draw interest this afternoon, with FOMC members Bullard, Barkin, and Bostic speaking.

We expect debt ceiling news to have more impact, with the threat of a US default having a greater significance.

However, staking statistics and the withdrawal profile will continue to provide direction. A further fall in ETH staking inflows and a narrower net staking surplus would deliver a bearish session.

Investors should also continue to monitor the crypto news wires for SEC v Ripple updates and Binance and Coinbase (COIN)-related news.

Ethereum Price Action

This morning, ETH was down 0.36% to $1,799. A mixed start to the day saw ETH rise to an early high of $1,807 before falling to a low of $1,793.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to move through the $1,811 pivot to target the First Major Resistance Level (R1) at $1,824 and the Sunday high of $1,830. A return to $1,830 would signal a breakout session. However, ETH staking statistics and US debt ceiling updates must support a bullish session.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,844 and resistance at $1,850. The Third Major Resistance Level (R3) sits at $1,877.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,791 in play. However, barring a risk-off-fueled sell-off, ETH should avoid sub-$1,750. The Second Major Support Level (S2) at $1,778 should limit the downside. The Third Major Support Level (S3) sits at $1,745.

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 $1,816. The 50-day EMA eased back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A move through the 50-day EMA ($1,816) would support a breakout from R1 ($1,824) and 100-day EMA ($1,830) to target R2 ($1,844) and the 200-day EMA ($1,846). However, failure to move through the 50-day EMA ($1,816) would leave S1 ($1,791) in view.

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