ETH to Continue Targeting $2,000 on Pre-Shapella Staking Inflows

Key Insights:

• On Thursday, ethereum (ETH) rallied by 4.54% to end the day at $1,818.
• Shapella upgrade silence left ETH in the hands of the US government and the NASDAQ Composite Index.
• The technical indicators remained bullish, leaving $2,000 in view.

Ethereum (ETH) rallied by 4.54% on Thursday. Reversing a 3.76% loss from Wednesday, ETH ended the day at $1,818. ETH held onto the $1,800 handle for the second time in three sessions.

A mixed start to the day saw ETH fall to an early low of $1,734. Steering clear of the First Major Support Level (S1) at $1,695, ETH rallied to a mid-afternoon high of $1,862. ETH broke through the First Major Resistance Level (R1) at $1,804 to test resistance at the Second Major Resistance Level (R2) at $1,868 before easing back to end the day at $1,818.

Former Fed Chair Yellen Counters the Fed Chair Powell-Fueled Sell-Off

Risk aversion hit the US markets on Thursday as fears of a banking crisis resurfaced after the Fed raised rates by 25 basis points on Wednesday.

Fed Chair Powell hinted at a Fed pause on lifting rates to assess the impact of the Fed rate hikes on the banking sector and the US economy. The decision to raise interest rates came despite the collapse of Silicon Valley Bank and Signature Bank (SBNY), leading to a slide in bank stocks early in the afternoon.

US Treasury Secretary Janet Yellen eased investor jitters, assuring investors that bank deposits were safe and that policymakers have the tools to tackle a banking crisis.

Speaking at the House of Representatives Appropriations subcommittee hearing, the former Fed Chair reportedly said,

“The strong actions we have taken to ensure that Americans’ deposits are safe. Certainly, we would be prepared to take additional actions if warranted.”

The NASDAQ Composite Index rose by 1.01% on Thursday, with the Dow and S&P 500 seeing gains of 0.23% and 0.30%, respectively. This morning, the NASDAQ mini was down 23.5 points.

ETH staking inflows eased back on Thursday but avoided sub-10,000. According to CryptoQuant, staking inflows declined from 32,640 ETH on Wednesday to 15,232 ETH on Thursday. Despite the decline, staking inflows remained elevated, supporting the current upward trend in the run-up to the Shapella hard fork.

The continued upward trend suggests a bullish response to the Shapella upgrade, with the total ETH value staked also rising.

A downward trend would suggest a jump in unstaking requests upon completion of the Shapella upgrade.

The Day Ahead

This afternoon, US economic indicators will influence the afternoon session. Private sector PMIs for Mach and core durable goods orders will draw interest as investors assess the impact of Fed rate hikes on the US economy.

From the Fed, FOMC member James Bullard will move the dial.

However, updates from the ongoing SEC v Ripple case and crypto exchange-related news will also provide direction. Binance and Coinbase (COIN) are currently in the hot seat.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.08% to $1,819. A range-bound start to the day saw ETH rise to an early high of $1,822 before easing back.

Technical Indicators

ETH needs to avoid the $1,805 pivot to target the First Major Resistance Level (R1) at $1,875. A move through the Thursday high of $1,862 would signal a breakout session. However, US economic indicators and 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 $1,933 and resistance at $2,000. The Third Major Resistance Level (R3) sits at $2,061.

A fall through the pivot would bring the First Major Support Level (S1) at $1,747 into play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$1,700 and the Second Major Support Level (S2) at $1,677. The Third Major Support Level (S3) sits at $1,549.

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 $1,753. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($1,753) would support a breakout from R1 ($1,875) to target R2 ($1,933) and $2,000. However, a fall through the 50-day EMA ($1,753) and S1 ($1,747) would give the bears a run at the 100-day EMA ($1,704). A fall through the 50-day EMA would send a bearish signal.