ETH Bears to Target Sub-$2,000 on Principal Withdrawal Projections

Key Insights:

• ETH rallied 4.37% on Friday to end the session at $2,102.
• Investor sentiment toward the Shapella Upgrade continued to deliver support, with SEC infighting also drawing investor interest.
• The technical indicators are bullish, signaling a run at $2,300.

Ethereum (ETH) rallied by 4.37% on Friday. Following a 4.95% breakout on Thursday, ETH ended the day at $2,102. ETH held onto the $2,100 handle for the first time since May 2022.

A mixed start to the day saw ETH slip to a first-hour low of $2,011. Steering clear of the First Major Support Level (S1) at $1,935, ETH surged to an early morning high of $2,131. ETH broke through the First Major Resistance Level (R1) at $2,059 and the Second Major Resistance Level (R2) at $2,104. An afternoon pullback saw ETH fall through the Major Resistance Levels before wrapping up the day at $2,102.

ETH Staking Statistics and SEC Commissioner Hester Peirce Deliver Support

ETH staking statistics continued to draw interest on Friday. Following Wednesday’s Shapella Upgrade, ETH staking inflows surged for two consecutive sessions to extend the upward trend in ETH staking inflows to six sessions.

According to CryptoQuant, staking inflows rose from 95,584 ETH on Thursday to 110,432 on Friday. Significantly, staking inflows exceeded 100,000 for the first time since February 2023.

Total value staked figures also delivered bullish signals, with the upward trend continuing despite an ETH price pullback this morning.

One key feature of the Shapella Upgrade was to unlock staked ETH on the Beacon Chain. However, withdrawal levels remained subdued, with the current ETH and broader crypto market bull run favoring staking.

According to TokenUnlocks, total pending withdrawals stood at 1.39 million ETH, equivalent to approximately $2.89 billion. Significantly, withdrawal rewards accounted for the lion’s share of withdrawals. However, TokenUnlocks projects a change in the composition of ETH withdrawals, with the chart below showing an anticipated surge in principal withdrawals, a bearish indicator.

Considering the withdrawal projections, investors should continue to monitor staking inflows and total value staked figures. A pullback in the total value staked would affirm the TokenUnlocks projection and signal a price reversal.

While staking statistics were the focal point, disappointing US economic indicators, hawkish Fed chatter, and SEC activity tested buyer appetite. However, SEC Commissioner Hester Peirce and the upward trend in staking inflows supported a bullish end to the session.

The Day Ahead

Staking statistics will need monitoring today, with a sharp rise in principal withdrawals and a slide in total value staked a bearish scenario.

However, updates from the ongoing SEC v Ripple case and Binance and Coinbase (COIN)-related news will also influence.

Ethereum Price Action

At the time of writing, ETH was down 0.75% to $2,086. A mixed start to the day saw ETH rise to an early high of $2,108 before falling to a low of $2,074.

ETH Technical Indicators

ETH needs to avoid the $2,081 pivot to target the First Major Resistance Level (R1) at $2152. A move through the Friday high of $2,131 would signal a breakout session. However, the crypto news wires and staking stats should support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $2,201. The Third Major Resistance Level (R3) sits at $2,321.

A fall through the pivot would bring the First Major Support Level (S1) at $2,032 into play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$2,000 and the Second Major Support Level (S2) at $1,961. The Third Major Support Level (S3) sits at $1,841.

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 $1,944. 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 the Major Support Levels and the 50-day EMA ($1,944) would support a breakout from R1 ($2,152) to give the bulls a run at R2 ($2,201). However, a fall through S1 ($2,032) would bring S2 ($1,961) and the 50-day EMA ($1,944) into view. A fall through the 50-day EMA would signal a bullish trend reversal.