ETH Return to $1,900 on Staking Inflow Surge Hinged on Debt Ceiling Talks

Key Insights:

• On Tuesday, ETH gained 1.98% to end the day at $1,854.
• ETH staking inflows and the Hong Kong Securities and Futures Commission delivered a bullish session.
• The technical indicators turned more bullish, signaling a return to $1,900.

Ethereum (ETH) rose by 1.98% on Tuesday. Following a 0.72% gain on Monday, ETH ended the day at $1,854. Significantly, ETH retook the $1,850 handle for the first time in thirteen sessions.

Tracking the broader crypto market, ETH fell to a first-hour low of $1,816. Steering clear of the First Major Support Level (S1) at $1,797, ETH rose to a mid-morning high of $1,874. ETH broke through the First Major Resistance Level (R1) at $1,835 and the Second Major Resistance Level (R2) at $1,851 to end the day at $1,854.

Staking Inflows and News from Hong Kong Delivered Support

According to CryptoQuant, staking inflows surged from 71,648 ETH on Monday to 217,056 ETH on Tuesday, the highest year-to-date. The surge in staking inflows delivered ETH price support and a move toward $1,900.

The total value staked climbed higher, supported by the jump in staking inflows and the bullish Tuesday session.

The withdrawal profile was bullish. Overnight, principal withdrawals eased back to normal levels. However, withdrawal projections for the morning session were more bearish, with principal withdrawals expected to spike before easing back to below-normal levels.

On Tuesday, the net ETH staking balance slipped from a surplus of 59,530 ETH on Monday to a 56,510 ETH surplus, equivalent to $101.65 million. Deposits totaled 92,640 ETH versus withdrawals of 36,140 ETH.

According to TokenUnlocks, total pending withdrawals stood at 40,450 ETH, equivalent to approximately $74.76 million. Notably, the staking APR stood at 8.66%, down by 3.56% over 24 hours.

Beyond the crypto market, the Hong Kong Securities and Futures Commission (HKSFC) moved to become a crypto hub.

The HKSFC announced that retail investors may trade crypto, effective June 1, 2023. The news delivered a morning breakout.

US economic indicators also provided support, with better-than-expected prelim service PMI numbers for May. However, the US debt ceiling impasse capped the upside.

The Day Ahead

It is a quiet day for ETH, with no US economic indicators to move the dial. However, the FOMC meeting minutes and debt ceiling talks will be in focus. While hawkish minutes would weigh on investor sentiment, progress toward a debt ceiling deal would provide support. US Treasury Secretary Janet Yellen will also speak today.

However, investors should continue to monitor the staking statistics and the withdrawal profile. A further rise in staking inflows and a net staking surplus widening would deliver price support.

Investors should also track the crypto news wires for SEC v Ripple updates and Binance and Coinbase (COIN)-related news.

Ethereum Price Action

This morning, ETH was down 0.38% to $1,847. A bearish start to the day saw ETH fall from an early high of $1,855 to a low of $1,846.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to move through the $1,848 pivot to target the First Major Resistance Level (R1) at $1,880. A move through the Tuesday high of $1,874 would signal a breakout session. However, staking statistics and US debt ceiling updates must support a bullish session.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,906. The Third Major Resistance Level (R3) sits at $1,964.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,822 in play. However, barring a risk-off-fueled sell-off, ETH should avoid sub-$1,750. The Second Major Support Level (S2) at $1,790 should limit the downside. The Third Major Support Level (S3) sits at $1,732.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a more bullish signal. Ethereum sat above the 200-day EMA, currently at $1,845. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A hold above the 200-day EMA ($1,845) would support a breakout from R1 ($1,880) to target R2 ($1,906). However, a fall through the EMAs and S1 ($1,822) would bring S2 ($1,790) into view.

A fall through the 50-day EMA ($1,825) would send a bearish signal.