ETH Staking Statistics and China Stats Support ahead of Gensler Testimony

Key Insights:

• ETH joined the broader market in negative territory on Monday, falling by 2.08% to end the day at $2,076.
• Staking statistics took a back seat, with Fed Fear and SEC regulation by enforcement weighing on investor sentiment.
• However, the technical indicators remain bullish, signaling a run at $2,300.

Ethereum (ETH) fell by 2.08% on Monday. Reversing a 1.29% gain from Sunday, ETH ended the day at $2,076. Despite the bearish session, ETH avoided sub-$2,000 for the fourth consecutive session.

A mixed start to the day saw ETH rise to a first-hour high of $2,122. Falling short of the First Major Resistance Level (R1) at $2,113, ETH fell to an early afternoon low of $2,058. ETH fell through the First Major Support Level (S1) at $2,082. Finding afternoon support, ETH revisited the $2,800 handle before easing back. Resistance at S1 pegged ETH back from recovery.

SEC Activity and Hawkish Fed Bets Test Buyer Appetite

SEC regulation by enforcement spooked investors on Monday. News of the SEC filing charges against Bittrex for operating an unregistered securities platform hit investor sentiment.

Fed Fear added to the bearish mood, with rising bets of a more hawkish Fed policy outlook weighing on riskier assets.

According to the FedWatchTool, there is a 91.0% probability of a 25-basis point Fed interest rate hike in 15 days. One month ago, there was a 20.7% chance of a 25-basis point May interest rate hike. Significantly, there are also increasing bets of a 25-basis point hike in June, up from 0% in March to 18.4% this morning.

Hopes of an H2 2023 interest rate cut are also subsiding. There is a 2.1% chance of a 25-basis point interest rate cut in July, down from 15.4% one month ago.

However, staking statistics remained bullish this morning, supporting the ETH climb to $2,200.

According to CryptoQuant, staking inflows fell from 19,424 ETH on Sunday to 89,696 on Monday. Despite the decline, staking inflows remained elevated, a bullish price signal.

Total value staked figures also delivered bullish signals, rising through Monday and this morning.

The post-Shapella Upgrade ETH withdrawals profile and Tuesday projections support delivered a more bearish outlook.

According to TokenUnlocks, total pending withdrawals stood at 0.926 million ETH, equivalent to approximately $1.93 billion. However, ETH withdrawals primarily comprised reward withdrawals, providing morning support. A higher principal withdrawal profile would be a bearish signal.

The Day Ahead

Investors should continue monitoring ETH staking statistics and withdrawal profiles.

SEC v Ripple case updates and Binance and Coinbase (COIN)-related news will also need consideration.

On Capitol Hill, the SEC Chair will give testimony to lawmakers at a digital asset sub-committee hearing. SEC Chair Gary Gensler will likely face lawmaker scrutiny on its regulation by enforcement mantra, the SEC’s links with FTX and its failings to prevent its collapse, and the classification of ETH and other cryptos as securities.

US economic indicators are unlikely to move the dial today, with the US housing sector in focus. However, Fed chatter will need monitoring throughout the afternoon session.

Ethereum Price Action

At the time of writing, ETH was up 0.58% to $2,088. A mixed start to the day saw ETH fall to an early high of $2,053 before rising to a high of $2,088.

Better-than-expected economic indicators from China delivered a morning boost.

ETH Technical Indicators

ETH needs to avoid the $2,085 pivot to target the First Major Resistance Level (R1) at $2,113 and the Monday high of $2,122. A return to $2,100 would signal a breakout session. However, the crypto news wires and staking statistics need to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $2,149 and resistance at $2,150. The Third Major Resistance Level (R3) sits at $2,213.

A fall through the pivot would bring the First Major Support Level (S1) at $2,049 into play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$2,000. The Second Major Support Level (S2) at $2,021 should limit the downside. The Third Major Support Level (S3) sits at $1,957.

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 $2,022. 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 S1 ($2,049) and the 50-day EMA ($2,022) would support a breakout from R1 ($2,113) to give the bulls a run at R2 ($2,149) and $2,150. However, a fall through S1 ($2,049) would bring the 50-day EMA ($2,022) and S2 ($2,021) into view. A fall through the 50-day EMA would signal a bullish trend reversal.