Ethereum Rally: Is Return Above $4,000 Nearing According to CPI Data?

Ethereum Rally: Is Return Above $4,000 Nearing According to CPI Data?

Ethereum (ETH) firmed at $3,920 today, temporarily reaching a price above $4,000 following the release of US inflation data for September. This data showed a smaller increase in the consumer price index (CPI) than expected, which has some investors optimistic. In particular, market analysis shows that many investors believe there is an 85% chance of two more rate cuts by the Federal Reserve (Fed) in 2025. This could have a significant impact on the markets.

According to FXStreet's report, Headline CPI rose 3% year-over-year, which is slightly higher than the previous month but remains below the forecast 3.1%. The core CPI, which excludes food and energy prices, showed a 0.2% rise from the previous month, also below expectations for a 0.3% increase. Annual core inflation remained at 3%, also below forecast levels. This data will play an important role in the upcoming Fed meetings on October 29th and 30th.

Market developments and liquidations

The market is showing growing expectations of Fed monetary easing, which is also reflected in the increased open interest in Ethereum. Open interest reached 11.75 million ETH, the highest level since the crash on October 10th. At the same time, Ethereum has suffered losses of $69.4 million in futures liquidations in the last 24 hours, with $41.4 million lost in long positions and $28 million in other positions.

Additionally, the S&P 500 was raised to a new record high of $6,806 last Friday, highlighting the positive sentiment in the market. However, despite these positive developments, sentiment around Ethereum remains cautious, which could be partly due to the existing trade tensions between the US and China. ETH tested the 100-day Exponential Moving Average (EMA) and is currently in a consolidation phase within the $3,800 to $4,100 price range.

Price views and technical analysis

Ethereum’s future price movements could be significant. Should the cryptocurrency clear the resistance at $4,100, it could be able to rise to $4,500. Conversely, a loss of support at $3,815 and $3,660 could lead to a decline to around $3,470. Technical indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) histograms currently point to bearish momentum and highlight the uncertainties affecting investors at the moment.

Overall, the situation around Ethereum and the market is characterized by a mixture of optimism and caution. Investors will have to watch the coming days closely, especially in light of the Federal Reserve's upcoming decisions.