ETH Faces Sub-$1,700 on Net Staking Balance Slump to a Deficit

Key Insights:

• On Sunday, ETH eked a 0.06% gain to end the day at $1,753.
• Staking statistics from the weekend left ETH trailing the front runners.
• The technical indicators remain bearish, signaling a return to sub-$1,700.

Ethereum (ETH) gained 0.06% on Sunday. Following a 4.83% loss on Saturday, ETH ended the week down 7.25% to $1,753. ETH ended the day at sub-$1,800 for the second time since May 13.

After a range-bound morning, ETH fell to an early afternoon low of $1,739. Steering clear of the First Major Support Level (S1) at $1,697, ETH rose to a late-session high of $1,779. However, falling short of the First Major Resistance Level (R1) at $1,826, ETH eased back to end the day at $1,753.

US Lawmakers Limit the Damage

It was a quiet Sunday session, with no US economic indicators or Fed chatter for investors to consider.

The lack of economic indicators and Fed chatter left ETH in the hands of the crypto news wires while the staking statistics continued to provide direction.

Overnight on Saturday, Senator Cynthia Lummis talked about ongoing work to deliver a crypto regulatory framework. Progress toward legislation to provide a regulatory framework supporting innovation while protecting investors would be a boon for the crypto market.

However, staking statistics were a drag despite an upswing in staking inflows.

Staking Statistics Reflect Investor Sentiment Toward the SEC

According to CryptoQuant, staking inflows increased from 19,584 ETH on Saturday to 41,888 on Sunday. Despite the upswing, inflows remained below normal levels.

The total value staked flattened further, with the staking statistics influencing.

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 before seeing a spike.

On Sunday, the net ETH staking balance tumbled by 170.96% to a deficit of 26,660 ETH, equivalent to $46.98 million. Deposits totaled 26,000 ETH versus withdrawals of 52,660 ETH. The fall to a net staking deficit was bearish.

According to TokenUnlocks, total pending withdrawals stood at 64,040 ETH, equivalent to approximately $111.74 million. Notably, the staking APR stood at 6.56%, down 1.50% over 24 hours.

The Day Ahead

It is a quiet start to the week, with no US economic indicators or Fed chatter to provide direction. The lack of economic indicators and Fed chatter will leave the crypto news wires and staking statistics to influence.

A widening of the net staking deficit would be a bearish price signal. Investors should monitor the withdrawal profile and staking inflows for direction. An increase in the staking APR should deliver support.

However, SEC v Ripple, SEC v Binance, and SEC v Coinbase (COIN)-related news will remain focal points.

Ethereum Price Action

This morning, ETH was down 0.43% to $1,746. A mixed start to the day saw ETH rise to an early high of $1,756 before falling to a low of $1,744.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to move through the $1,757 pivot to target the First Major Resistance Level (R1) at $1,775 and the Sunday high of $1,779. A move through R1 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 the Second Major Resistance Level (R2) at $1,797 and resistance at $1,800. The Third Major Resistance Level (R3) sits at $1,837.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,735 in play. However, barring another risk-off-fueled sell-off, ETH should avoid sub-$1,700. The Second Major Support Level (S2) at $1,717 should limit the downside.

The Third Major Support Level (S3) sits at $1,677.

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 $1,814. The 50-day EMA slid further back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

A move through R1 ($1,775) would give the bulls a run at R2 ($1,797) and the 50-day EMA ($1,814). However, failure to move through the 50-day EMA ($1,814) would leave S1 ($1,735) in view. An ETH breakout from the 50-day EMA would send a bullish signal.