ETH Eyes Sub-$1,400 as Investors Await USD Coin and SVB Updates

Key Insights:

• On Saturday, ethereum (ETH) rallied 3.63% to end a four-day losing streak and wrap up the day at $1,484.
• Silicon Valley Bank, USD Coin, and the Shanghai Upgrade remained focal points for investors.
• However, the technical indicators remain bearish, with sub-$1,350 in view.

Ethereum (ETH) rallied by 3.63% on Saturday. Reversing a 0.35% loss from Friday, ETH ended the day at $1,484. While ETH wrapped up the day at sub-$1,500 for the third time since January 13, ETH ended a four-day losing streak.

A bullish start to the day saw ETH rally to an early morning high of $1,499 before hitting reverse. ETH broke through the First Major Resistance Level (R1) at $1,457 and the Second Major Resistance Level (R2) at $1,483. The reversal saw ETH fall to a mid-morning low of $1,418. However, steering clear of the First Major Support Level (S1) at $1,388, ETH revisited $1,490 before easing back.

ETH Staking Inflows Are Price Negative

There were no updates on the delayed Shanghai upgrade to distract investors from the US banking woes and the USD Coin (USDC) de-peg.

The next step toward the heavily anticipated Shanghai upgrade begins on Tuesday with the release of the Goerli testnet. Smooth testing should enable an April Shanghai upgrade and support the withdrawal of staked ETH from the Beacon Chain.

However, after some fanfare in late February, ETH staking inflows have receded in March, delivering uncertainty on how ETH stakers will respond to the Shanghai upgrade. A wave of withdrawals would be a bearish price scenario. Investors should monitor net ETH staking inflows and total value staked numbers to assess sentiment and trends in the run-up to the Shanghai upgrade.

According to CryptoQuant, ETH net staking inflows stood at 15,712 ETH on Saturday. While up from 10,560 ETH on Friday, inflows are well below the 2023 high of 198,560. While the sharp decline in staking inflows was ETH price negative, the delay to the Shanghai upgrade likely contributed to the slide to sub-20,000 levels.

SVB and USD Coin to Trump Shanghai Upgrade News

While Shanghai upgrade news will continue to influence, Silicon Valley Bank and USD Coin re-pegging progress should remain the key drivers. The collapse of SVB came hot on the heels of the news of Silvergate Bank planning to liquidate.

Amicae Curiae attorney John Deaton shared one tweet distinguishing between Silvergate Bank and Silicon Valley Bank, which stated,

“What’s amazing is the crypto bank (Silvergate) that everyone was losing their mind over (cough warren) is currently doing an orderly liquidation despite a run, while the traditional/recommended bank, SVB, is what was taken into receivership within 24 hours of a run.”

On Saturday, the Federal Reserve announced an emergency meeting for Monday which will likely tackle the collapse of SVB. Updates from the emergency meeting will have a material influence on investor sentiment.

However, USD Coin will also be in the spotlight. The ability to redeem on a 1:1 basis and news of Circle plugging the $3.3 billion hole would be significant.

For the Ethereum network, there is also the question of security or not security. We can expect more from the CFTC and the SEC as they battle to take control of the digital asset space continues.

The Day Ahead

Silicon Valley Bank and USD Coin will remain the focal points for investors today. Investors will be mindful of an emergency Fed meeting on Monday that will likely focus on SVB.

While the threat of SVB contagion will test buyer appetite, investors will also need to monitor updates from Circle on filling the SVB reserve gap.

With crypto market headwinds ever present, Investors should continue to track the crypto news wires, with regulatory activity and US lawmaker chatter focal points. However, 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 down 0.45% to $1,477. A mixed start to the day saw ETH rise to an early high of $1,490 before falling to a low of $1,466.

ETH Technical Indicators

ETH needs to avoid the $1,467 pivot to target the Second Major Resistance Level (R2) at $1,516. A return to $1,500 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 $1,549. The Third Major Resistance Level (R3) sits at $1,631.

A fall through the pivot would bring the First Major Support Level (S1) at $1,434 into play. However, barring another broad-based crypto market sell-off, ETH should avoid sub-$1,350. The Second Major Support Level (S2) at $1,385 should limit the downside. The Third Major Support Level (S3) sits at $1,303.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 50-day EMA, currently at $1,514. The 50-day EMA fell back from the 200-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through the 50-day EMA ($1,514) and R1 ($1,516) would give the bulls a run at R2 ($1,549) and the 100-day EMA ($1,552). A breakout from the 50-day EMA would send a bullish signal. However, failure to move through the 50-day EMA ($1,514) would leave the bears in the driving seat.