ETH Bears Eye Sub-$1,850 on Gary Gensler Rhetoric

Key Insights:

• ETH joined the broader market in the red on Wednesday, falling 0.37% to end the day at $1,872.
• Staking statistics failed to deliver support as investors responded to SEC Chair Gary Gensler chatter.
• However, the technical indicators remained bullish, signaling a return to $1,950.

Ethereum (ETH) fell by 0.37% on Wednesday. Following a 0.11% loss on Tuesday, ETH ended the day at $1,872. Despite the bearish session, ETH visited the $1,900 handle for the second time in six sessions.

Ethereum Price Action

This morning, ETH was down 0.11% to $1,870. A range-bound start to the day saw ETH rise to an early high of $1,876 before falling to a low of $1,864.

Daily Chart

The Daily Chart showed ETH/USD hover below the lower level of the $1,930 – $1,900 resistance band.

However, ETH/USD currently sits above the 50-day ($1,855) and 200-day ($1,761) EMAs, signaling bullish momentum over the near and long term.

Notably, the 50-day EMA widened further from the 200-day EMA and reflected bullish momentum.

Looking at the 14-Daily RSI, the 50.53 reading signaled a moderately bullish outlook, aligned with the 50-day and 200-day EMAs. Significantly, the RSI supports a breakout from the $1,900 – $1,930 resistance band to target $1,950.

4-Hourly Chart

Looking at the 4-Hourly Chart, the ETH/USD faces strong resistance at the $1,900 psychological level. ETH/USD sits below the 50-day EMA ($1,881) but above the 200-day EMA ($1,863), sending bearish near-term but bullish longer-term signals.

Significantly, the 50-day EMA narrowed on the 200-day EMA, signaling a fall through the 200-day EMA ($1,863) to bring sub-$1,850 into play.

However, a breakout from the 50-day EMA ($1,881) would support a move through the $1,900 – $1,930 resistance band to give the bulls a run at $1,950.

The 14-4H RSI reading of 46.11 indicates a bearish stance, with selling pressure outweighing buying pressure. Significantly, the bearish RSI aligns with the 50-day EMA and supports a return to sub-$1,850.

Staking Statistics Delivered a Wednesday Cushion

According to CryptoQuant, staking inflows increased from 68,288 ETH on Tuesday to 77,472 on Wednesday. Significantly, staking inflows reached the highest level since June 27.

The overnight withdrawal profile was relatively bearish, with principal withdrawals spiking to above-normal levels. However, withdrawal projections for the morning session are bullish. Projections show ETH withdrawal levels will sit at below-normal levels throughout the morning session.

On Wednesday, the net ETH staking balance stood at a 54,800 ETH surplus ($102.77 million), up 180% over 24 hours. Deposits totaled 71,450 versus withdrawals of 16,650 ETH.

According to TokenUnlocks, total pending withdrawals stood at 21,110 ETH, equivalent to approximately $39.45 million. Notably, the staking APR stood at 5.56%, unchanged over 24 hours. While the downward trend in the staking APR is ETH price negative, the decline in pending withdrawals is positive.

SEC Gary Gensler Overshadowed Cooler US Inflation Numbers

It was a busy Wednesday session. The US CPI Report was in focus. Softer inflation numbers eased bets on a September Fed rate hike. However, the CPI Report failed to shift sentiment toward the July move, leaving ETH unmoved.

SEC Chair Gary Gensler tested buyer appetite, with the SEC Chair delivering more regulatory uncertainty.

SEC Chair Gary Gensler added to the bearish mood with comments about the crypto space and the lack of regulatory oversight. Gensler also reacted to calls to recuse himself from the crypto industry after sweeping statements, classifying all cryptos (except BTC) as securities, saying,

“I take an oath, along with my fellow commissioners, to enforce the law that Congress passed and how the courts interpret it. It really comes down to protecting the investing public and looking through the facts and the circumstances of each of the individual tokens and the platforms themselves.”

The SEC Chair also discussed the lack of risk management to address wash trading but did not comment on the latest BTC ETF applications. However, the comments were negative enough to cast doubt on the SEC approving one, some, or all the BTC ETF applications.

The Day Ahead

It is a busy Thursday session. The US PPI Report and jobless claims will influence investor sentiment this afternoon. However, the Producer Price Index numbers must refuel bets on a hawkish September Fed policy decision to move the dial.

Crypto market sensitivity to the Fed remains in place, leaving ETH and the broader market exposed to inflation numbers and bets on Fed interest rate moves.

However, beyond the US economic calendar and the staking statistics, investors should track ETF chatter, with Binance and SEC v Ripple-related news also focal points.