ETH and a Run at $1,950 in the Hands of the US Debt Ceiling Vote

Key Insights:

• On Wednesday, ETH joined the broader market in the red, falling by 1.42% to end the day at $1,874.
• US debt ceiling jitters and economic data from China overshadowed bullish staking statistics.
• However, the technical indicators remain bullish, signaling a run at $2,000.

Ethereum (ETH) fell by 1.42% on Wednesday. Reversing a 0.42% gain from Tuesday, ETH ended the day at $1,874. Significantly, ETH rose by 0.18% in May, extending the winning streak to five months.

A mixed start to the day saw ETH rise to an early morning high of $1,908. Falling short of the First Major Resistance Level (R1) at $1,919, ETH fell to an early afternoon low of $1,848. ETH fell through the First Major Support Level (S1) at $1,883 and briefly through the Second Major Support Level (S2) at $1,864 before ending the day at $1,874.

China PMIs and US Debt Ceiling Jitters Overshadow Staking Stats

According to CryptoQuant, staking inflows increased from 77,280 ETH on Tuesday to 99,808 on Wednesday. The increase in staking inflows came despite bearish sentiment toward the debt ceiling vote, which left ETH in the red mid-week.

The total value staked climbed higher, supported by the increase in ETH staking inflows and the net staking balance.

The overnight withdrawal profile was bullish. Principal withdrawals sat at normal levels. Withdrawal projections for the morning session are also bullish, with principal ETH withdrawals expected to remain at below-normal levels.

On Wednesday, the net ETH staking balance increased by 22.84% to a surplus of 72,500 ETH, equivalent to $137.98 million. Deposits totaled 85,480 ETH versus withdrawals of 12,980 ETH.

According to TokenUnlocks, total pending withdrawals stood at 56,270 ETH, equivalent to approximately $106.16 million. Notably, the staking APR stood at 8.77%, unchanged over 24 hours.

Beyond the crypto market, PMI numbers from China and investor angst over the debt ceiling and impending vote in the House of Representatives overshadowed the staking stats and bullish US economic indicators.

The Day Ahead

It is a busy day for ETH. China’s Caixin Manufacturing PMI will draw interest this morning. Another disappointing set of numbers would test buyer appetite.

However, a House of Representatives vote on the debt ceiling deal could deliver relief. US lawmakers will vote on the debt ceiling deal this morning (2030 ET).

Looking ahead to the US session, ADP nonfarm employment change, initial jobless claims, and the ISM Manufacturing PMI will move the dial. While investors are pricing in a more dovish Fed, solid labor market numbers could refuel bets on a 25-basis point June interest rate hike.

However, staking statistics and the withdrawal profile will continue to influence. A further increase in staking inflows and a slide in ETH withdrawals would deliver a bullish session.

SEC v Ripple updates and Binance and Coinbase (COIN)-related news would also move the dial.

Ethereum Price Action

This morning, ETH was up 0.03% to $1,875. A mixed start to the day saw ETH rise to an early high of $1,889 before falling to a low of $1,871.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to move through the $1,877 pivot to target the First Major Resistance Level (R1) at $1,905 and the Wednesday high of $1,908. A return to $1,900 would signal a breakout session. However, staking statistics and the crypto news wires must support a bullish session.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,937 and resistance at $1,950. The Third Major Resistance Level (R3) sits at $1,997.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,845 in play. However, barring a risk-off-fueled sell-off, ETH should avoid sub-$1,800. The Second Major Support Level (S2) at $1,817 should limit the downside.

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 $1,860. The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA converging on the 200-day EMA, delivering bullish signals.

A hold above the 50-day ($1,860) would support a breakout from R1 ($1,905) to target R2 ($1,937) and $1,950. However, a fall through the 50-day ($1,860) would bring the 200-day ($1,848) and 100-day ($1,848) EMAs and S1 ($1,845) into view.

A fall through the 50-day EMA would send a bearish signal.