ETH Stats Turn Bullish but Fed Chair Powell Could Deliver Sub-$1,650

Key Insights:

• On Monday, ETH joined the broader market in positive territory, gaining 0.99% to end the session at $1,737.
• Network updates and market sentiment toward the planned launch of the iShares Bitcoin ETF delivered a bullish session.
• The technical indicators remain bearish, signaling a return to $1,650.

Ethereum (ETH) gained 0.99% on Monday. Reversing a 0.41% decline from Sunday, ETH ended the day at $1,737. Despite the bullish session, ETH fell to sub-$1,700 for the first time in three sessions.

After a range-bound morning, ETH fell to a late afternoon low of $1,699. ETH fell through the First Major Support Level (S1) at $1,706 before rising to a late-session high of $1,751. ETH briefly broke through the First Major Resistance Level (R1) at $1,740 before easing back to end the day at $1,737.

JPMorgan Gives ETH a Push Higher

News of Ethereum developers proposing to increase the validator limit from 32 ETH to 2,048 ETH drew investor interest. Developers floated the idea on an Ethereum Core Developer call on June 15. Ethereum migrated to a Proof-of-Stake protocol in 2022.

Initially, the Ethereum community received a frosty reception. SEC Chair Gary Gensler labeled all crypto, excluding bitcoin (BTC), as securities. However, sentiment has shifted in recent weeks.

A JPMorgan (JPM) Report suggested a likely ETH price surge after the SEC released the William Hinman speech-related documents in the ongoing SEC v Ripple. The report highlighted William Hinman’s view that ether is not a security. Also, the speech-related documents discussed a regulatory gap, where tokens on an appropriately decentralized network no longer qualify as a security.

For the crypto community, this is the second time ETH found support from William Hinman’s comments. In 2018, Hinman famously said BTC and ETH are not securities. JP Morgan considered the William Hinman speech-related documents in its report.

BTC and ETH would likely find strong support should they officially fall under the purview of the CFTC.

Staking Statistics Send Mixed Signals

According to CryptoQuant, staking inflows increased from 25,184 ETH on Sunday to 68,192 on Monday. Despite the Monday bounce, inflows remained below the all-important 100,000 threshold.

The total value staked climbed at a more marked pace, with the pickup in staking inflows providing support.

The overnight withdrawal profile was bullish, with principal withdrawals falling to below-normal levels. However, withdrawal projections for the morning session were more bearish, with principal withdrawals projected to rise above normal levels.

On Monday, the net staking balance declined by 37.85% to a surplus of 15,430 ETH, equivalent to $26.73 million. Deposits totaled 27,090 ETH versus withdrawals of 11,660 ETH.

According to TokenUnlocks, total pending withdrawals stood at 55,150 ETH, equivalent to approximately $95.56 million. Notably, the staking APR stood at 6.02%, down 0.50% over 24 hours.

The Day Ahead

It is a busy Tuesday session. While US housing sector data is unlikely to draw interest, Fed Chair Powell will move the dial this afternoon. The Fed Chair will give testimony on Capitol Hill, with the US economy, inflation, and Fed monetary policy likely to be hot topics.

Staking statistics will also provide direction. A pickup in the staking APR and a widening net staking surplus would send bullish signals. However, market sentiment has to improve further to support another sharp pickup in staking inflows.

While the Fed and the staking statistics will move the dial, SEC v Ripple, SEC v Binance, and SEC v Coinbase (COIN)-related news also need consideration.

Ethereum Price Action

This morning, ETH was down 0.21% to $1,733. A mixed start to the day saw ETH rise to an early high of $1,749 before falling to a low of $1,729.

ETH Technical Indicators

Looking at the EMAs and the 4-hourly candlestick chart (below), it was bearish signals. Ethereum sat at the 50-day EMA, currently at $1,732. The 50-day EMA slipped back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

A breakout from the 50-day EMA ($1,732) would support a move through R1 ($1,759) and the 100-day EMA ($1,760) to target R2 ($1,781). However, failure to breakout from the 50-day EMA ($1,732) would leave S1 ($1,707) and sub-$1,700 Major Support Levels in view. An ETH breakout from the 50-day EMA would send a bullish signal.

Resistance & Support Level

ETH needs to avoid the $1,729 pivot to target the First Major Resistance Level (R1) at $1,759. A move through the Monday high of $1,751 would signal an extended breakout session. However, ETH staking statistics and Fed Chair Powell must support a bullish session.

In the event of an extended rally, the bulls would likely test the Second Major Resistance Level (R2) at $1,781 and resistance at $1,800. The Third Major Resistance Level (R3) sits at $1,833.

A fall through the pivot would bring the First Major Support Level (S1) at $1,707 into play. However, barring a risk-off-fueled sell-off, ETH should avoid sub-$1,650. The Second Major Support Level (S2) at $1,677 should limit the downside.

The Third Major Support Level (S3) sits at $1,625.