Ether price is rising, but there is a risk that $ 2,300 will be converted into new resistance
The Federal Reserve (Fed) chairman has brushed off inflation concerns that appear to coincide with a rally for Ether.
Ether has rebounded over $ 2,000 as traders evaluate Federal Reserve Chairman Jerome Powell’s testimony before Congress.
The price rose 6% to $ 2,019 before falling slightly to the current level of $ 1,987. Likewise, Bitcoin has a positive 7-day correlation with Ether at 0.84, if only by a modest 0.8% to $ 32,737.
Ether jumps into the important support zone | Source: TradingView
Powell presented his semi-annual monetary policy report to Congress on Wednesday, July 14, the day after the US consumer price index (CPI) dated the 5th three decades.
In his prepared remarks to Congress, Powell stated that inflation will continue to rise in the coming months. However, he added that rising consumer prices would not prevent them from abandoning their persistent bond buying policy.
Powell said her monthly debt limit of $ 120 billion – which supported the U.S. economy throughout the Covid19 pandemic – is still a long way off. Quoting the US job market, he said its full recovery remains a pain.
The statement comes after a Bank of America (BoA) poll of global fund managers expecting the world economy to continue to improve fell sharply from 91% in March, down from 47% in July. The same poll called Long Bitcoin – bet on Bitcoin price spike – one of the busiest trades alongside ESG Long and Commodity Long.
Economic expectations have reached their peak | Source: boa
But both Bitcoin and Ether fell after Tuesday (July 13) the CPI report and before Powell’s hearing. Part of this is due to concerns that the Fed will signal a reduction in bond purchases in 2020 and not raise the key rate until January 2023.
Powell’s statement about the austerity plan has generated short-term optimism in the crypto market, which is benefiting Bitcoin and ETH.
Just saw the news. Inflation! Are any of us surprised? The government prints more dollars, so the others are worth less. Happy to be a baby #bitcoin hodler. The best inflation protection.
– Tim Draper (@TimDraper) July 14, 2021
Is it a technical leap?
Ether’s recent rally is also taking place amid a level of technical support that has curbed the recent downtrend in the past.
Aether trapped in a symmetrical triangle area | Source: TradingView
The above price floor acts as an uptrend line in a symmetrical triangle pattern. Ether has been oscillating within the structure since mid-June, as shown in the graph above, increasing the likelihood of retesting the triangular resistance trendline (above $ 2,300) in the near next session.
However, symmetric triangles are continuation patterns that often take prices in the direction of their previous trend. Since Ether’s current triangle formation occurs during a downtrend, the path of least resistance is down.
Symmetrical triangle breakout situations | Source: Scanz Trading Blog
As a result, Ether continues to face downside risk to technical patterns. However, Ether performed better than expected in the second quarter despite the brutal sell-off in the crypto market.
in the report Q2 announced in July that data intelligence company CoinMetrics found Ether ended its fiscal year 13.2% higher than Bitcoins -38.88%.
“Ether is benefiting from the interest of retail investors, partly driven by the rapid rise in non-fungible tokens (NFTs). Although media interest in NFT peaked in March, it helped draw unprecedented mainstream attention to Ethereum, resulting in a massive influx of new users. “
Much bullish outlook for Ether comes from the London hard fork. The upgrade will implement four proposed improvements to the Ethereum blockchain. One of the proposals, called EIP-1559, is to make ether a deflationary asset by burning off some of the fees charged by Ethereum users.
However, the investment sentiment tracker Santiment is somewhat cautious and warns traders against excessive speculation related to the London hard fork. An excerpt from the July 7th newsletter reads:
“People can say, ‘It’s different this time,’ because Ether can now be staked out, and with the release of EIP-1559, that will change the game. Right now this is all speculation and no one will really know how the market will react to the launch. It could read: “Buy the rumor, sell the truth”.
You can see the details of the ether price.
According to Cointelegraph