Ethereum hovers near $1,868 as EIP-8361 staking debate splits builders

Ethereum trades near $1,868, compressed below a descending trendline, while a proposal to taper staking rewards splits the builder community.

Ethereum traded near $1,868 on Aug. 5, little changed over 24 hours, as the token compressed below a descending trendline that has capped upside since late July. The price has repeatedly failed to hold above $1,900, leaving the psychological $2,000 level out of reach.

Analyst Michaël van de Poppe identified $1,800 as the decisive support level. "ETH holds a crucial support level at $1,800," van de Poppe said. "A breakout to $2,000+ is simply on the horizon, and I think we'll see $2,300-2,500."

The daily chart shows ETH trading below its 20-day simple moving average at $1,887.53, with the 100-day SMA at $1,918.22 and the 200-day SMA at $2,074.86 creating stacked resistance. The token still holds above the 50-day SMA at $1,788.07, preserving the recovery that began after the June sell-off near $1,500. The Bull Bear Power indicator sits at minus 14.96, showing sellers retain a small advantage while remaining far above the deeply negative levels of the June decline.

On the 4-hour chart, ETH approaches the upper boundary of a descending channel that has guided price lower since the July 27 peak near $1,975. The immediate breakout area sits between $1,875 and $1,885; a 4-hour close above the channel and the daily 20-day SMA would open a retest of $1,900. Momentum remains weak rather than decisively bearish, with Aroon Up at 14.29 percent and Aroon Down at 0 percent, while Chaikin Money Flow at minus 0.02 points to modest net selling pressure.

CoinGlass' one-week liquidation heatmap shows leveraged positions clustered above the current price. Liquidity has accumulated around $1,890 to $1,905, with a much larger concentration near $1,940, levels that could act as price magnets if ETH clears its descending trendline. A move through $1,940 would open the way toward $1,975 and $2,000, though the daily 100-day SMA at $1,918 must first be reclaimed. Liquidity below the market sits near $1,850, $1,820 and $1,800, so a rejection below $1,900 could trigger long liquidations and pull ETH toward the lower clusters.

EIP-8361 adds a policy variable

The technical test comes as Ethereum developers debate EIP-8361, a draft proposal designed to taper consensus-layer issuance as the share of staked ETH increases. The proposal would burn a progressively larger share of validator rewards, reaching 100 percent at a 50 percent staking ratio, when all newly issued consensus rewards would be destroyed instead of paid to validators. Transaction fees and maximal extractable value would remain separate sources of validator income.

EIP-8361 is not a hard cap on staking. It seeks to remove the issuance-based incentive to keep staking once the ratio approaches 50 percent. Six authors, including Ethereum Foundation researcher Justin Drake, submitted the draft on Aug. 4, and the proposal remains under discussion with no approval for a network upgrade.

The plan has divided the ecosystem. Aave founder Stani Kulechov argued developers should prioritize privacy and Ethereum's role in the financial system rather than adjusting staking issuance. Ted Pillows supported that view, writing: "ETH should be focused on capturing more value and scaling the network. Build a valuable, scalable flywheel, not spend time talking about reducing staking fees."

The proposal could support ETH's long-term supply outlook by limiting new issuance, but it does not provide an immediate price driver. Its near-term effect remains tied to market expectations and the debate over validator incentives.

Can Ethereum reclaim $2,000?

Ethereum's first bullish confirmation would be a 4-hour close above $1,885, followed by a daily move through the $1,918 to $1,940 resistance range. Clearing those levels could trigger short liquidations and allow ETH to retest $1,975 and $2,000, with the 200-day SMA at $2,074 coming into focus on a sustained break.

The bearish scenario begins with another rejection below $1,900. Losing $1,850 would expose $1,820 and $1,800, while a daily close below the 50-day SMA at $1,788 would weaken the broader recovery structure.

For US investors, Ethereum's ability to reclaim $2,000 will depend more on spot demand, broader risk appetite and institutional flows than on EIP-8361 alone. The proposal may shape ETH's longer-term issuance policy, but price must first escape its short-term descending channel.

This article is for informational purposes only and does not constitute investment advice.