ETH Need a Rebound in Staking Inflows to Target $2,000

Key Insights:

• On Monday, ETH fell by 0.84% to end the day at $1,893.
• US debt ceiling deal-related news tested buyer appetite at the start of the week.
• However, the technical indicators are bullish, signaling a run at $2,000.

Ethereum (ETH) fell by 0.84% on Monday. Partially reversing a 4.26% gain from Sunday, ETH ended the day at $1,893. Significantly, ETH avoided sub-$1,850 for the first time since May 7.

A bullish start to the day saw ETH rise to a first-hour high of $1,929. Falling short of the First Major Resistance Level (R1) at $1,945, ETH fell to a late afternoon low of $1,874. However, steering clear of the First Major Support Level (S1) at $1,848, ETH revisited the $1,900 handle before easing back to end the day at $1,893.

US Debt Ceiling News and Staking Inflows Weighed

According to CryptoQuant, staking inflows increased from 42,368 ETH on Sunday to 59,712 ETH on Monday. Despite the increase, staking inflows remained below recent highs.

The total value staked climbed higher at a slower pace to leave ETH at sub-$1,900

The overnight withdrawal profile was also bearish. Overnight, principal withdrawals spiked to above-normal levels. Withdrawal projections for the morning session are also bearish, with principal ETH withdrawals expected to see further spikes.

On Monday, the net ETH staking balance slid by 40% to a net surplus of 36,360 ETH, equivalent to $67.33 million. Deposits totaled 46,330 ETH versus withdrawals of 9,960 ETH.

According to TokenUnlocks, total pending withdrawals stood at 53,820 ETH, equivalent to approximately $102.3 million. Notably, the staking APR stood at 8.79%, up 0.46% over 24 hours.

Beyond the crypto market, reports of several Republicans planning to vote against the US debt ceiling deal weighed on buyer appetite. However, bets on a 25-basis point June interest rate hike eased on Monday.

According to the CME FedWatch Tool, the probability of a June hike fell from 64.2% to 57.3% on Monday.

The Day Ahead

It is a busier day for ETH. US consumer confidence figures will influence the afternoon. An unexpected pickup in consumer confidence would deliver support while also likely to nudge the bets of a Fed June interest rate hike higher.

Economists forecast the CB Consumer Confidence Index to fall from 101.3 to 99.0.

While the numbers will draw interest, US debt ceiling-related news and Fed chatter will also move the dial.

However, staking statistics and the withdrawal profile will continue to influence. A jump in staking inflows and a slide in principal withdrawals would deliver a bullish session.

SEC v Ripple updates and Binance and Coinbase (COIN)-related news would also move the dial.

Ethereum Price Action

This morning, ETH was up 0.56% to $1,903. A mixed start to the day saw ETH fall to an early low of $1,882 before rising to a high of $1,913.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to avoid a fall through the $1,899 pivot to target the First Major Resistance Level (R1) at $1,923 and the Monday high of $1,929. A move through the morning high of $1,913 would signal a breakout session. However, 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 $1,954 and resistance at $2,000.

A fall through the pivot would bring the First Major Support Level (S1) at $1,868 into play. However, barring a risk-off-fueled sell-off, ETH should avoid sub-$1,850 and the Second Major Support Level (S2) at $1,844. The Third Major Support Level (S3) sits at $1,789.

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 $1,845. The 50-day EMA crossed through the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A hold above the 50-day ($1,845) would support a breakout from R1 ($1,923) to target R2 ($1,954) and $2,000. However, a fall through S1 ($1,868) would bring the 50-day ($1,845) and the 200-day ($1,844) EMAs and S2 ($1,844) into view.

A fall through the 50-day EMA would send a bearish signal.