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ETH Needs to Test $1,900 or Face Sub-$1,800 on Regulatory Uncertainty

By:
Bob Mason
Published: Mar 27, 2023, 02:52 GMT+00:00

After a bullish Sunday session, ETH was in the red this morning. Staking statistics and regulatory uncertainty weighed on investor sentiment.

ETH Tech Analysis - FX Empire.

In this article:

Key Insights:

  • On Sunday, ethereum (ETH) joined the broader market in positive territory, rising by 1.83% to end the day at $1,776.
  • Easing Deutsche Bank jitters and sentiment toward the SEC v Ripple case delivered support, while ETH staking stats were bearish.
  • However, the technical indicators remained bullish, leaving $2,000 in view.

Ethereum (ETH) rose by 1.83% on Sunday. Reversing a 0.46% loss from Saturday, ETH ended the week down 0.59% to $1,776. Despite the bullish session, XRP failed to hold onto the $1,800 handle.

A mixed start to the day saw ETH fall to an early low of $1,741. Steering clear of the First Major Resistance Level (R1) at $1,718, ETH rallied to an early afternoon high of $1,801. ETH broke through the First Major Resistance Level (R1) at $1,768 and briefly through the Second Major Resistance Level (R2) at $1,791 before ending the day at $1,776.

Shapella Upgrade Silence Left ETH in the Hands of the Broader Market

There were no Shapella upgrades for investors to consider, with the upgrade set for mid-April. The lack of network news left ETH in the hands of the broader crypto market.

Easing Deutsche Bank (DB) jitters and investor sentiment toward the SEC v Ripple case provided price support.

Over the weekend, there was no frantic activity in the German capital to spook investors. German lawmakers quickly pointed out last week that Deutsche Bank is well-capitalized and profitable.

Hopes of a Ripple victory in the SEC v Ripple case also delivered support.

However, headwinds linger, with Binance and Coinbase (COIN) joining a growing list of crypto players on the SEC radar.

Pre-Shapella ETH Staking Movements are Price Bearish

ETH staking inflows returned to sub-10,000 on Sunday, a bearish signal. According to CryptoQuant, staking inflows fell from 13,536 ETH on Saturday to 8,640 ETH on Sunday, the lowest inflow since March 5 (3,552). A period of sub-10,000 ETH inflows could signal unstakers outstripping stakers after the Shapella update.

Staking inflows slide to sub-10,000 ETH.
ETH Staking Inflows 270323

The total value staked also declined on Sunday. While a decline is not uncommon, an extending downward trend would be a bearish signal.

Total value staked pulled back on Sunday.
Total Value Staked 270323

The Day Ahead

It is a quiet day on the global economic calendar. The lack of external market forces will leave ETH in the hands of banking sector-related news and the crypto news wires.

Investor focal points will likely include the ongoing SEC v Ripple case and Binance and Coinbase (COIN)-related news.

However, with lawmakers and regulators looking to divert attention from the banking sector, increased scrutiny and regulatory activity would also test buyer appetite.

This afternoon, Fed commentary and the NASDAQ Composite Index will also need consideration. The NASDAQ mini was up 24.5 points this morning.

NASDAQ correlation.
ETH-NASDAQ Correlation 270323 Daily Chart

Ethereum (ETH) Price Action

At the time of writing, ETH was down 0.52% to $1,767. A range-bound start to the day saw ETH rise to an early high of $1,782 before falling into the red.

ETH sees morning red.
ETHUSD 270323 Daily Chart

Technical Indicators

ETH needs to move through the $1,773 pivot to target the First Major Resistance Level (R1) at $1,804. A move through the Sunday high of $1,801 would signal a breakout session. However, the crypto news wires should be ETH-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,833 and resistance at $1,850. The Third Major Resistance Level (R3) sits at $1,893.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,744 in play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$1,700. The Second Major Support Level (S2) at $1,713 should limit the downside. The Third Major Support Level (S3) sits at $1,653.

ETH support levels in play below the pivot.
ETHUSD 270323 Hourly Chart

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 $1,757. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA pulling further from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($1,757) would support a breakout from R1 ($1,804) to target R2 ($1,833) and $1,850. However, a fall through the 50-day EMA ($1,774) would give the bears a run at S1 ($1,744) and the 100-day EMA ($1,721). A fall through the 50-day EMA would send a bearish signal.

EMAs remain bullish.
ETHUSD 270323 4 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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