ETH Faces Sub-$1,850 as Investors Monitor the Terraform Labs Case

Key Insights:

• ETH joined the broader market in positive territory on Tuesday, gaining 0.92% to end the day at $1,874.
• MicroStrategy plans to acquire more BTC, and Justin Sun’s support for Curve Finance delivered a broad-based crypto boost.
• However, shorter-term technical indicators remain bearish, signaling a fall to sub-$1,800.

Ethereum (ETH) gained 0.92% on Tuesday. Reversing a 027% fall from Monday, ETH ended the day at $1,874. Despite the bullish session, ETH fell short of $1,900 for the ninth consecutive session.

Ethereum Price Action

This morning, ETH was down 0.64% to $1,862. A mixed start to the day saw ETH rise to an early high of $1,880 before falling to a low of $1,860.

Daily Chart

The Daily Chart showed ETH hovering at the lower level of the $1,895 – $1,865 support band. However, ETH sat below the 50-day EMA ($1,871) while holding above the 200-day ($1,784), sending bearish near-term but bullish longer-term price signals. Notably, the 50-day EMA narrowed to the 200-day EMA, a bearish price signal.

Looking at the 14-Daily RSI, the 46.88 reading reflects bearish sentiment, supporting a fall through the $1,815 – $1,795 support band to target the 200-day EMA ($1,784). However, an ETH move through the 50-day EMA ($1,871) would support a breakout from the upper band of the $1,865 – $1,895 support band to target $1,950.

4-Hourly Chart

Looking at the 4-Hourly Chart, the ETH/USD faces strong resistance at $1,900. ETH sits at the lower level of the $1,895 – $1,865 support band. However, ETH remained below the 50-day ($1,865) and 200-day ($1,876) EMAs, sending bearish near and longer-term price signals.

An ETH move through the 50-day and 200-day EMAs would support a breakout from the $1,865 – $1,895 support band to target $1,950. However, failure to move through the 50-day EMA would leave the $1,815 – $1,795 support band in play.

The 14-4H RSI reading of 50.89 sends moderately bullish price signals, with buying pressure outweighing selling pressure. Significantly, the RSI aligns with the 50-day EMA, supporting a fall through the $1,815 – $1,795 support band.

Curve Finance and MicroStrategy News Delivered Support

MicroStrategy (MSTR) filed a request to sell up to $750 million in stock to acquire BTC. According to the quarterly report for the quarter ending June 30, 2023, MicroStrategy held 152,333 BTC. The anticipated increase in BTC holdings supported the BTC return to $30,000.

However, news of Tron (TRX) founder Justin Sun acquiring CRV also provided market support.

Despite the bullish moves, ETH continued to fall short of $1,900 as investors digested Terra Labs Court case-related news.

Terraform Labs presiding Judge Jed Rakoff, caused a stir by saying that Judge Torres made a mistake in the SEC v Ripple Court ruling when declaring that XRP was not a security when sold on exchanges. Rakoff believed that there is no difference between stocks and institutional sales in terms of being a security.

SEC Chair Gary Gensler considers ETH a security, leaving the second-largest crypto by market cap vulnerable to downside risks on Court rulings and SEC chatter.

Staking Statistics Send Bearish Price Signals

According to CryptoQuant, staking inflows increased from 28,992 ETH on Monday to 37,472 on Tuesday. Despite the uptrend, staking inflows remained well below the 100,000 threshold.

The overnight withdrawal profile was bullish, with principal withdrawals at normal levels. However, withdrawal projections for the morning session are bearish. Projections show ETH withdrawals will spike before returning to normal withdrawal levels.

On Tuesday, the net ETH staking balance stood at a 20,600 ETH surplus ($38.40 million), down 17% over 24 hours. Deposits totaled 29,510 versus withdrawals of 8,910 ETH.

According to TokenUnlocks, total pending withdrawals stood at 43,620 ETH, equivalent to approximately $81.27 million. Notably, the staking APR stood at 5.71%, unchanged over 24 hours. While the staking APR upward trend was bullish, the decline in the net staking balance and elevated pending withdrawals were bearish price scenarios.