ETH Bulls Eye a Breakout from $1,950 on Shapella Upgrade Reaction

Key Insights:

• On Wednesday, ETH bucked the broader crypto market trend, rising by 1.43% to end the day at $1,919.
• The successful Shapella Upgrade provided support, with ETH staking stats bullish.
• The technical indicators are bullish, signaling a return to $2,000.

Ethereum (ETH) rose by 1.43% on Wednesday. Reversing a 0.99% loss from Tuesday, ETH ended the day at $1,919. Despite a choppy session, ETH avoided sub-$1,850 for the second consecutive session.

A bearish start to the day saw ETH fall to an early morning low of $1,856. ETH fell through the First Major Support Level (S1) at $1,870 before rallying to an early afternoon high of $1,934. ETH broke through the First Major Resistance Level (R1) at $1,926 before a return to sub-$1,900. However, a bullish end to the day saw ETH retest R1 before easing back.

Shapella Upgrade Delivers a Trend Bucking Wednesday Session

A successful Shapella Upgrade delivered ETH price support on Wednesday, despite the upgrade enabling withdrawals from the Beacon Chain.

Price action on Wednesday contrasted with the Merge that sent ETH into reverse in September.

Staking inflows climbed higher, with total value staked continuing its upward trend, signaling bullish sentiment toward Ethereum following the shift to a Proof-of-Stake protocol.

According to CryptoQuant, staking inflows increased from 11,456 ETH on Tuesday to 16,736 on Wednesday. Significantly, staking inflows rose for the fourth consecutive day.

Total value staked also rose, supporting the bullish ETH response to the heavily anticipated Shapella upgrade.

US economic indicators and the FOMC meeting minutes had no impact, despite the broader crypto market hitting reverse in response to the latest core inflation numbers.

The Day Ahead

As investors respond further to the Shapella Upgrade, total value staked figures will continue to draw interest.

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

US economic indicators will need consideration this afternoon. Wholesale inflation and jobless claims will be in focus. Softer wholesale inflation figures would be a bullish scenario.

We also expect chatter from the IMF/World Bank Spring Meetings to draw investor interest.

Ethereum Price Action

At the time of writing, ETH was down 0.55% to $1,908. A mixed start to the day saw ETH rise to an early high of $1,922 before falling to a low of $1,901.

ETH Technical Indicators

ETH needs to avoid the $1,903 pivot to target the First Major Resistance Level (R1) at $1,950. A move through the Wednesday high of $1,934 would signal a breakout session. However, the crypto news wires should be crypto-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,981 and resistance at $2,000. The Third Major Resistance Level (R3) sits at $2,059.

A fall through the pivot would bring the First Major Support Level (S1) at $1,872 into play. However, barring an event-fueled crypto market sell-off, ETH should avoid sub-$1,850 and the Second Major Support Level (S2) at $1,825. The Third Major Support Level (S3) sits at $1,747.

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 $1,873. 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 ($1,873) would support a breakout from R1 ($1,950) to target R2 ($1,981) and $2,000. However, a fall through the 50-day EMA ($1,873) and S1 ($1,872) would bring the 100-day EMA ($1,842) and S2 ($1,825) into view. A fall through the 50-day EMA would send a bearish signal.