ETH Pre-Shapella Upgrade Staking Inflows Signal a Return to $2,000

Key Insights:

• On Wednesday, ethereum (ETH) joined the broader market in positive territory, rising by 1.07% to end the day at $1,793.
• Market reaction to news of SEC Chair Gary Gensler attending a subcommittee hearing supported a breakout morning session.
• The technical indicators remain bullish, bringing $2,000 into view.

Ethereum (ETH) rose by 1.07% on Wednesday. Following a 3.39% rally on Tuesday, ETH ended the day at $1,793. ETH revisited the $1,800 handle for the first time in three sessions.

A mixed start to the day saw ETH fall to a first-hour low of $1,773. Steering clear of the First Major Support Level (S1) at $1,719, ETH rallied to a mid-morning high of $1,827. ETH broke through the First Major Resistance Level (R1) at $1,813 before easing back to end the day at $1,793.

CFTC and SEC Attempts to Regulate by Enforcement Drive ETH Demand

This week, a surge in regulatory activity failed to have the desired effect on ETH and the broader crypto market.

News of the CFTC filing a lawsuit against Binance, CZ, and Binance executives briefly sent ETH into the red. SEC activity has also failed to spook investors. However, the news of US lawmakers targeting the SEC and SEC Chair Gary Gensler supported a bullish mid-week session.

On Wednesday, House Financial Services Chair McHenry announced that Gary Gensler would appear before a digital assets subcommittee on April 18 to discuss his rule-making and approach to digital assets.

Investors expect US lawmakers to grill the SEC Chair as more crypto-related firms explore options to relocate overseas. The latest gaff from US regulators has been the inability to agree on whether ETH is a commodity or a security. If regulators cannot agree, then there is little chance of crypto exchanges being able to navigate the murky regulatory waters.

This month, SEC Chair Gary Gensler called all cryptos except BTC securities, while the CFTC labeled ETH, LTC and BTC, and stablecoins, including BUSD, as commodities in its lawsuit against Binance.

The latest regulatory moves could also favor a Ripple victory in the ongoing SEC v Ripple case.

Pre-Shapella ETH Staking Movements Rise Further

ETH staking inflows recovered further from two consecutive days at sub-10,000 ETH levels, a bullish signal. According to CryptoQuant, staking inflows rose from 24,768 ETH on Tuesday to 25,824 ETH on Wednesday. A bullish Wednesday session following the CFTC classification of ETH as a commodity supported a further increase in staking.

The total value staked also rose further on Wednesday, with the upswing in total value staked another bullish signal.

The Day Ahead

Regulatory activity will remain the focal point. However, rulings from the SEC v Ripple case would move the dial. Following the CFTC filing against Binance and classification of ETH, LTC, and BTC as commodities, SEC and CFTC chatter will also influence.

However, investors should also continue to monitor Coinbase (COIN)-related news.

This afternoon, US economic indicators should have a limited impact on ETH and the broader crypto market. Staking inflows would likely draw more interest as the Shapella upgrade date nears.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.07% to $1,795. A mixed start to the day saw ETH rise to an early high of $1,830 before sliding to a low of $1,766.

ETH tested the First Major Resistance Level (R1) at $1,822 and the First Major Support Level (S1) at $1,768.

Technical Indicators

ETH needs to move through the $1,798 pivot to retarget the First Major Resistance Level (R1) at $1,822 and the morning high of $1,830. A return to $1,800 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 $1,852. The Third Major Resistance Level (R3) sits at $1,906.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,768 in play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$1,700. The Second Major Support Level (S2) at $1,744 should limit the downside. The Third Major Support Level (S3) sits at $1,690.

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 $1,764. The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA pulling away from the 200-day EMA, delivering bullish signals.

A hold above S1 ($1,768) and the 50-day EMA ($1,764) would support a breakout from R1 ($1,822) to target R2 ($1,852). However, a fall through S1 ($1,768) and the 50-day EMA ($1,764) would give the bears a run at S2 ($1,744) and the 100-day EMA ($1,736). A fall through the 50-day EMA would send a bearish signal.