ETH Bulls to Target $1,950 on US Debt Ceiling Vote and Staking Stats

Key Insights:

• On Tuesday, ETH gained 0.42% to end the day at $1,901.
• Staking statistics offset debt ceiling vote jitters.
• The technical indicators are bullish, signaling a run at $2,000.

Ethereum (ETH) rose by 0.42% on Tuesday. Partially reversing a 0.84% loss from Monday, ETH ended the day at $1,901. Significantly, ETH avoided sub-$1,850 for the second time since May 7.

A choppy start to the day saw ETH fall to a first-hour low of $1,882. Steering clear of the First Major Support Level (S1) at $1,868, ETH rose to a late morning high of $1,918. Falling short of the First Major Resistance Level (R1) at $1,923, ETH eased back to end the session at $1,901.

US Debt Ceiling News Cap the Upside

According to CryptoQuant, staking inflows increased from 59,712 ETH on Monday to 77,280 ETH on Tuesday. Despite the increase, staking inflows remained below 100k levels (a bullish entry level).

The total value staked climbed higher at a more marked pace, supporting an ETH return to $1,900.

The overnight withdrawal profile was less bearish. Principal withdrawals eased back to normal levels. Withdrawal projections for the morning session are also bullish, with principal ETH withdrawals expected to fall to below-normal levels.

On Tuesday, the net ETH staking balance jumped by 62.3% to 59,020 ETH, equivalent to $112.08 million. Deposits totaled 63,520 ETH versus withdrawals of 4,500 ETH.

According to TokenUnlocks, total pending withdrawals stood at 20,500 ETH, equivalent to approximately $38.23 million. Notably, the staking APR stood at 8.77%, down 0.23% over 24 hours.

Beyond the crypto market, US economic indicators failed to move the dial. Investors brushed aside a modest fall in the US CB Consumer Confidence Index, with US debt ceiling updates the focal point. Monday reports of Republican lawmakers planning to vote down the debt ceiling deal tested buyer appetite.

However, the stats did support a more hawkish Fed monetary policy outlook. According to the CME FedWatch Tool, the probability of a June hike increased from 58.4% to 66.6% on Tuesday. The CB Consumer Sentiment Index increased from 103.7 to 102.3 in May versus a forecasted 99.0.

The Day Ahead

It is a busy day for ETH. US JOLTs Job Openings will move the dial. Tight labor market conditions support a higher for longer Fed interest rate trajectory. With the US Jobs Report out on Friday, investors should also consider quit rates, which reflect employee sentiment toward labor market conditions.

Upbeat stats would fuel bets of a June 25-basis point interest rate hike. While the numbers will draw interest, US debt ceiling-related news and Fed chatter will also move the dial. FOMC member Bowman is on the calendar to speak today.

However, debt ceiling-related news will remain the key driver. The markets expect a vote on the deal today.

On a busy Wednesday session, staking statistics and the withdrawal profile will continue to influence. A jump in ETH staking inflows and a slide in ETH withdrawals would deliver a bullish session.

Ethereum Price Action

This morning, ETH was down 1.77% to $1,867. A mixed morning saw ETH rise to an early high of $1,908 before falling to a low of $1,858. ETH fell through the First Major Support Level (S1) at $1,883 and briefly through the Second Major Support Level (S2) at $1,864.

Private sector PMI numbers from China weighed on riskier assets this morning.

NBS Manufacturing and Non-Manufacturing PMI figures for May gave investors a better view of the macroeconomic environment midway through the second quarter.

The NBS Manufacturing PMI declined from 49.2 to 48.8, with the Non-Manufacturing PMI falling from 56.4 to 54.5. Economists forecast the NBS Manufacturing PMI to rise from 49.2 to 49.4 and the Non-Manufacturing PMI to fall from 56.4 to 55.0.

The NBS numbers are a precursor to the Caixin Manufacturing PMI numbers that will have more impact on riskier assets.

ETH Technical Indicators

Resistance & Support Levels

ETH needs to move through S1 and the $1,900 pivot to target the First Major Resistance Level (R1) at $1,919. A move through the morning high of $1,908 would signal a breakout session. However, ETH 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 $1,936 and resistance at $1,950. The Third Major Resistance Level (R3) sits at $1,972.

Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $1,864 in play. However, barring a risk-off-fueled sell-off, ETH should avoid sub-$1,850 and the Third Major Support Level (S3) at $1,828.

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 $1,858. 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 ($1,858) would support a breakout from S1 ($1,883) to target R1 ($1,919). However, a fall through the 50-day ($1,858) would bring the 200-day ($1,847) and 100-day ($1,846) EMAs into view.

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