ETH and a Return to $1,800 Hinged on the Fed and US Lawmakers

Key Insights:

• On Tuesday, ETH extended its losing streak to three sessions, falling by 0.17% to end the day at $1,740.
• Staking statistics were bearish, with market reaction to the release of the Hinman docs also weighing.
• The technical indicators remain bearish, signaling a return to sub-$1,700.

Ethereum (ETH) fell by 0.17% on Tuesday. Following a 0.57% loss on Monday, ETH ended the day at $1,740. Significantly, ETH failed to revisit the $1,800 handle for the second consecutive session.

After a choppy start to the day, ETH rose to a midday high of $1,766. Falling short of the First Major Resistance Level (R1) at $1,768, ETH fell to a mid-afternoon low of $1,724. ETH briefly fell through the First Major Support Level (S1) at $1,728 before revisiting the $1,750 handle. However, a bearish end to the day left ETH in the red.

SEC Silence Overshadows Market-Friendly US CPI Report

It was a busy Tuesday session. The US CPI Report and Fed monetary policy were in focus. Softer US inflation and easing bets on a June Fed interest rate hike provided brief support.

However, rising bets on a July Fed rate hike and the market reaction to the Hinman speech-related documents left ETH in the red.

The Hinman docs failed to deliver a settlement, leaving the SEC v Ripple case in the hands of the Courts. Notably, the unwillingness to settle means the SEC would likely appeal a Ripple victory.

Such an eventuality would leave the US digital asset space in regulatory uncertainty for an extended period. This could also permit the SEC to continue regulating by enforcement.

Staking Statistics Left ETH Under Pressure for the Third Session

According to CryptoQuant, staking inflows increased from 48,736 ETH on Monday to 74,016 on Tuesday. Despite the upswing, inflows continued to sit below recent highs.

The total value staked climbed higher, with the staking inflows supporting the uptrend.

The overnight withdrawal profile was bullish, with principal withdrawals below normal levels. However, withdrawal projections for the morning session were bearish, with principal ETH withdrawals projected to spike.

On Tuesday, the net ETH staking surplus stood at 39,240 ETH, equivalent to $68.31 million. Deposits totaled 52,100 ETH versus withdrawals of 12,860 ETH.

According to TokenUnlocks, total pending withdrawals stood at 186,630 ETH, equivalent to approximately $325.96 million. Notably, the staking APR stood at 6.30%, down 1.56% over 24 hours.

The Day Ahead

It is a busy day on the US economic calendar. US wholesale inflation figures will draw interest ahead of the Fed. A softer inflation number would ease bets on a July Fed interest rate hike.

However, the FOMC interest rate decision, economic projections, and FOMC press conference will be the focal points. A hawkish Fed pause would weigh on investor sentiment.

Beyond the US economic calendar, investors should track the crypto news wires. SEC v Ripple, SEC v Binance, and SEC v Coinbase (COIN)-related news will move the dial.

With the SEC staying silent on the Hinman docs, regulation by enforcement looks set to continue until lawmakers intervene.

Ethereum Price Action

This morning, ETH was up 0.34% to $1,745. A range-bound start to the session saw ETH fall to an early low of $1,738 before finding support.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to avoid the $1,743 pivot to target the First Major Resistance Level (R1) at $1,763 and the Tuesday high of $1,766. A return to $1,750 would signal a breakout session. However, ETH staking statistics, the crypto news wires, and the Fed must support a bullish session.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,785 and resistance at $1,800. The Third Major Resistance Level (R3) sits at $1,827.

A fall through the pivot would bring the First Major Support Level (S1) at $1,721 into play. However, barring a risk-off-fueled sell-off, ETH should avoid sub-$1,700. The Second Major Support Level (S2) at $1,701 should limit the downside.

The Third Major Support Level (S3) sits at $1,659.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 50-day EMA, currently at $1,786. The 50-day EMA slid further back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

A move through R1 ($1,763) would give the bulls a run at R2 ($1,785) and the 50-day EMA ($1,786). However, failure to move through the 50-day EMA ($1,786) would leave S1 ($1,721) in view. An ETH breakout from the 50-day EMA would send a bullish signal.