Ethereum’s native token Ether (ETH) has the potential to double its market value in the coming months thanks to a combination of supporting fundamental and technical indicators.
Ether price rose more than 9% on Friday, hitting nearly $ 3,300 for the first time in ten days. The gains came mainly after prices rebounded in all top cryptocurrencies, including Bitcoin (BTC), which rose 9.5% to $ 48,000, a 10-day high.
The boom in the crypto market on Friday coincided with the release of the U.S. Department of Commerce report on consumer spending.
The data showed that the US core consumer spending index, the Federal Reserve’s preferred inflation indicator, rose 0.3 percent in August and 3.6 percent year-over-year. This pushed core inflation to a 30-year high.
Speculators tend to see Bitcoin as a hedge against inflation, which explains the benchmark cryptocurrency’s recent response to higher consumer prices in the US.
Meanwhile, the average 30-day correlation of Ether with Bitcoin is close to 0.89, according to data from CryptoWatch, which has led ETH to hover almost in BTC.
A University of Michigan poll, conducted August 25 through September 27, found that US consumer long-term inflation expectations rose to 3%, the highest level in a decade.
The results appear to contradict the views of Federal Reserve Chairman Jerome Powell; It has dampened the “temporary” rise in inflation that has been rising for months, but acknowledged during a recent Senate hearing that higher consumer prices are likely to persist until at least next year.
As a result, inflationary pressures have prompted crypto bulls to view Bitcoin as a last resort, with MicroStrategy CEO Michael Saylor suggesting that companies move their cash-based silver to BTC.
In the context of rampant inflation, cash and credit became bad debt. Turn your balance sheet into #bitcoin to turn a liability into an asset. https://t.co/kzCEPDA4S2
– Michael Saylor⚡️ (@michael_saylor) October 1, 2021
MicroStrategy holds approximately 0.5% of the total circulating bitcoin supply, which is currently valued at more than $ 6 billion.
Ethereum went through a network hard fork on August 5th, which further increases the bullish outlook for Ether due to the classic law of supply and demand.
The upgrade, known as the London Hard Fork, introduced an improved protocol, EIP-1559, that burned off part of Ethereum’s network charges known as base charges. So far, according to WatchTheBurn.com, activating EIP-1559 has permanently removed 410,404 ETH (~ $ 1.32 billion) from active listing.
Ethereum is also preparing to switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS). So it has introduced a staking pool that allows users to earn rewards and increase their ETH holdings if they tie 32 ETH to their official PoS smart contract within a certain period of time.
So far, the amount of ETH stored in the so-called Ethereum 2.0 staking contract has increased from around 11,500 in November 2020 to 7.82 million ETH today. However, the transition has temporarily withdrawn 7.82 million ETH from circulation.
On the other hand, the total amount of ether tokens held across all crypto exchanges has fallen to a record low. Data from CryptoQuant shows that exchanges currently only hold 18.1 million ETH, compared to 23.73 million ETH a year ago.
The declining ETH reserves suggest that traders may want to keep their Ether tokens instead of selling them for other assets. As a result, this creates a supply bottleneck for investors wishing to participate in the Ethereum market, making ETH more valuable.
With EIP 1559 #Ether Supply is expected to peak at around 120 million, then it will continue to decline as demand increases. That almost certainly means the numbers will go up.
– Lark Davis (@TheCryptoLark) September 24, 2021
The combination of lower supply and higher demand acts as bullish support for the ether price. Meanwhile, further evidence of a bullish breakout is provided by the cup-and-grip pattern on Ether’s longer time frame charts.
Related: Ethereum Bears are looking for points to expire the $ 340 million ETH option on Friday
The Cup and Handle is a bullish continuation pattern consisting of a rounded bottom and a descending channel setup, as shown in the graphic below. The profit target of the structure usually corresponds to the maximum height of the cup.
Given that the Cup’s resistance is close to $ 4,000, a breakout from there is expected to push ETH price above $ 6,000, which is almost double the current rate.
.
.
While Aave finds itself in uncertain territory, a fresh face in the crypto scene, Qubetics…
Analysts push for a Dogecoin price surge to its $0.2288 yearly high while ETFSwap (ETFS)…
Discover the promising altcoin under $1 that may outperform XRP amid election volatility and market…
Campinas, Brazil, 5th November 2024, Chainwire
Terra Shuttle Bridge has now been closed, and all remaining LUNC and USTC tokens have…
Miami, Florida, 5th November 2024, Chainwire
This website uses cookies.