ETH Falls Short of $1,900 on Fed Fear ahead of the Shapella Upgrade

Key Insights:

• On Sunday, ETH ended a three-day losing streak, rising by 0.54% to end the day at $1,860.
• SEC and US lawmaker silence and bullish sentiment toward the Shapella upgrade provided support.
• The technical indicators remain bullish, signaling a return to $2,000.

Ethereum (ETH) rose by 0.54% on Sunday. Partially reversing a 0.80% loss from Saturday, ETH ended the week up by 3.59% to $1,860. ETH fell short of the $1,900 handle for the third consecutive session.

A choppy start to the day saw ETH fall to a mid-morning low of $1,823. ETH fell through the First Major Support Level (S1) at $1,838 and the Second Major Support Level (S2) at $1,827 before rising to a late high of $1,875. However, coming up against the First Major Resistance Level (R1) at $1,871, ETH eased back to end the day at $1,860.

Staking Inflows and Fed Fear Test Support as Shapella Upgrade Nears

ETH staking inflows fell on Sunday to test buyer appetite. According to CryptoQuant, staking inflows fell from 13,120 ETH on Saturday to 8,864 on Sunday. Inflows returned to sub-10,000. While inflows at sub-10,000 levels are a bearish signal, there has been an ongoing trend of sub-10,000 over the weekends, limiting the impact on ETH.

ETH staking inflows and total value staked numbers will have more influence as the Shapella upgrade date approaches. The Shapella upgrade will occur at epoch 194,048 or on approximately April 12 (Wed).

However, total value staked continued the upward trend, supported by the bullish Sunday session.

Despite the mixed ETH staking numbers, rising bets of a 25-basis point Fed interest rate hike left ETH at sub-$1,900. According to the CEM FedWatch Tool, the probability of a 25-basis point Fed interest rate hike in May rose from 48.4% (Fri) to 66.0% this morning.

The Day Ahead

Staking inflows and the total value stakes will likely remain a focal point. A pre-Shapella Upgrade spike in ETH staking inflows should be a bullish signal.

However, investors should track updates from the ongoing SEC v Ripple case. Additionally, ETH would likely continue to show sensitivity to regulatory and US lawmaker activity.

ETH sits in the middle of several crypto-related battles, including the SEC v Ripple case and the SEC v CFTC battle to rule the crypto skies. SEC Chair Gary Gensler and CFTC Chairman Rostin Behnma disagree on whether ETH is a commodity or security.

Binance and Coinbase (COIN)-related news will also move the dial.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.14% to $1,857. A mixed start to the day saw ETH rise to an early high of $1,865 before falling to a low of $1,848.

Technical Indicators

ETH needs to avoid the $1,853 pivot to target the First Major Resistance Level (R1) at $1,882. A move through the Sunday high of $1,875 would signal a breakout session. However, the crypto news wires should be crypto-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,905. The Third Major Resistance Level (R3) sits at $1,957.

A fall through the pivot would bring the First Major Support Level (S1) at $1,830 into play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$1,800. The Second Major Support Level (S2) at $1,801 should limit the downside. The Third Major Support Level (S3) sits at $1,749.

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 $1,848. The 50-day EMA pulled further 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 ($1,848) would support a breakout from R1 ($1,882) to target R2 ($1,905). However, a fall through the 50-day EMA ($1,848) would bring S1 ($1,830) and the 100-day EMA ($1,819) into play. A fall through the 50-day EMA would send a bearish signal.