Ethereum (ETH / USD) continued its uptrend as investors reacted to relatively weak inflation data from the US the price of the coin rose to $ 3,278, which was the highest level since May 19. . As a result, the market value of all Ether tokens increased by more than $ 378 billion.
Ethereum’s rally accelerates
Ether is the second largest cryptocurrency in the world after Bitcoin. The token helps power the Ethereum ecosystem, which enables developers to create quality decentralized applications. Today, most of the better known cryptocurrency projects such as Aave, Maker, and Uniswap have been created using Ethereum technology.
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Ethereum’s price rally accelerated in the evening session after it became known that US consumer prices were falling. According to the Department of Labor, the general CPI was unchanged at 5.4% annually. But it also decreased slightly from month to month.
The CPI includes everything, including food, energy, clothing, and furniture. In the same period, the core CPI, which excludes food and energy, fell from 4.5% in June to 4.3% in July.
Inflation plays an important role in the prices of cryptocurrencies. On the one hand, it is part of the dual mandate role of the Federal Reserve. This simply means that the Federal Reserve looks at both inflation and the unemployment rate when making its decision.
As such, with inflation on the rise and the unemployment rate higher than before the pandemic, there is a chance that the bank will maintain its easy money policies.
Ethereum’s price has also rebounded due to the overall performance of the decentralized finance (DeFi) industry. This week, the total value locked in the industry has risen to more than $ 80 billion.
This is notable as the value of the industry declined below $ 45 billion during the cryptocurrency sell-off. It is also somewhat important considering that most DeFi projects are built using Ethereum technology.
Ethereum price prediction
The three-hour chart shows that the ETH price has been in a strong uptrend in recent weeks. It has been moving literally in a straight line and is about 87% above its lowest in July. As a result, the uptrend has been supported by the 25- and 50-day moving average.
Most importantly, the volume of the coin has increased, which is usually a good thing. It is also supported by the rising trend line shown in black. Therefore, the pair is likely to continue to climb as the bulls target key resistance at $ 3,000.
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