ETH Bulls to Target $1,850 on US Stats and Easing SVB Contagion

Key Insights:

• On Tuesday, ethereum (ETH) extended its winning streak to four sessions, rising by 1.37% to $1,705.
• US economic indicators and easing Silicon Valley Bank and Signature Bank contagion delivered price support.
• The technical indicators turned bullish, with $2,000 in view.

Ethereum (ETH) rose by 1.37% on Tuesday. Following a 5.65% rally on Monday, ETH ended the day at $1,705. Significantly, ETH last held onto the $1,700 handle on September 12, 2022.

A choppy morning saw ETH fall to a mid-morning low of $1,651 before making a move. Steering clear of the First Major Support Level (S1) at $1,601, ETH surged to a late afternoon high of $1,788. ETH broke through the First Major Resistance Level (R1) at $1,733 to test the Second Major Resistance Level (R2) at $1,784 before easing back to end the day at $1,705.

US CPI Report and Shift in Sentiment Toward Fed Policy Delivered Support

On Tuesday, the all-important US CPI Report delivered a breakout afternoon session. In February, the annual inflation rate softened from 6.4% to 6.0%, in line with forecasts. The softer headline figure supported a less aggressive Fed interest rate trajectory to bring inflation to target.

ETH responded to the CPI Report, rallying 3.65% to $1,747 within the first thirty minutes of the CPI Report.

Easing Silicon Valley Bank (SIVB) and Signature Bank (SBNY) contagion jitters also contributed to the session gains. Investors responded further to White House and regulator assurances of containing the regional banking crisis.

On Monday, US President Joe Biden reportedly said,

“Americans can rest assured that our banking system is safe. Your deposits are safe. Let me also assure you we will not stop at this. We will do whatever is needed on top of all this.”

On Tuesday, the NASDAQ Composite Index rallied by 2.14%, with the Dow and S&P 500 seeing gains of 1.06% and 1.65%, respectively. The NASDAQ mini was down 16.75 points this morning.

As investors continue tracking the US bank-related, the Goerli testnet release drew interest on Tuesday. The release of the Goerli testnet brings ethereum stakers closer to being able to withdraw staked crypto from the Beacon Chain.

Ethereum developer Tim Beiko had this to say,

“Withdrawals are being processed, but it seems like several validators haven’t upgraded. Looking into it. One challenge with testnet validators is that given the ETH is worthless, there’s little incentive to run a validator/monitor it.”

While early progress in testing the Goerli Testnet was ETH price bearish, ETH staking inflows increased, with a more bullish ETH price outlook supporting higher inflows.

According to CryptoQuant, ETH net staking inflows stood at 18,720 ETH on Tuesday. While up from 14,400 ETH on Monday, inflows are well below the 2023 high of 198,560.

The move to 20,000 levels would be ETH bullish.

The Day Ahead

US economic indicators will draw interest this afternoon. Softer wholesale inflation numbers and another rise in retail sales would be ETH-positive.

Away from the economic calendar, Goerli testnet testing news will also influence.

However, investors should continue to track the crypto news wires, with regulatory activity and US lawmaker chatter focal points. A quiet session would leave Binance, FTX, and updates from the ongoing SEC v Ripple case to move the dial.

Ethereum (ETH) Price Action

At the time of writing, ETH was up 0.28% to $1,710. A mixed start to the day saw ETH fall to an early low of $1,686 before rising to a high of $1,723.

Technical Indicators

ETH needs to move through the $1,715 pivot to target the First Major Resistance Level (R1) at $1,778 and the Tuesday high of $1,788. A return to $1,750 would signal a bullish session. However, Shanghai upgrade news and the crypto news wires should be ETH-friendly to support a breakout.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,852. The Third Major Resistance Level (R3) sits at $1,989.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,641 in play. However, barring a broad-based crypto market sell-off, ETH should avoid sub-$1,600 and the Second Major Support Level (S2) at $1,578. The Third Major Support Level (S3) sits at $1,441.

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 $1,593. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA breaking through the 200-day EMA, delivering bullish signals.

A hold above S1 ($1,641) and the 50-day EMA ($1,593) would support a breakout from R1 ($1,778) to target R2 ($1,852). However, a fall through S1 ($1,641) would give the bears a run at the 50-day ($1,593). A fall through the 50-day EMA would send a bearish signal.