- Ethereum ETFs record second consecutive day of inflows amid in-line CPI data.
- Jump Trading moves over $46 million worth of ETH in what may be another dump.
- Key trendline holds strong after rejecting Ethereum's upward move.
Ethereum (ETH) is down 1.7% on Wednesday as low Consumer Price Index (CPI) inflation data and rising ETH ETF inflows hint that a rally may be imminent. However, a key trendline suggests ETH may repeat history by consolidating for a few weeks before beginning a fresh upward move.
Daily digest market movers: Low CPI, Ethereum ETF inflows, Jump Crypto potential ETH sale
The US Consumer Price Index (CPI) declined to 2.9% YoY, below the expected value of 3.0, according to data from the Bureau of Labor Statistics (BLS). Following the decline, the probability of the Federal Reserve (Fed) cutting interest rates by 25 basis points on the CME rose to 56.5%.
BREAKING: July CPI inflation rate falls to 2.9%, below expectations of 3.0%.
— The Kobeissi Letter (@KobeissiLetter) August 14, 2024
Core CPI inflation fell to 3.2%, in-line with expectations of 3.2%.
This marks the first month with CPI inflation below 3.0% since March 2021.
The first rate cut since 2020 is coming next month.
As a result, Ethereum could see a recovery in the coming weeks as risk assets like cryptocurrencies thrive during a lower interest rate environment.
On the ETF front, Ethereum ETFs recorded net inflows of $24.3 million on Tuesday, marking a second consecutive day of positive flows for the products.
Notably, BlackRock ETHA saw net inflows of $49.1 million, bringing its total inflows since launch to $950.2 million. Also, Fidelity FETH had inflows of $5.4 million. Meanwhile, Grayscale ETHE recorded outflows of $31 million, extending its cumulative outflows to $2.32 billion.
Ethereum ETF Flows
Several crypto community members have expressed sentiment suggesting Ethereum may stage a rally in the coming weeks if the Fed cuts rates and ETH ETF inflows continue.
On the other hand, Jump Trading may be resuming its potential ETH selling spree after claiming 17,049 ETH worth $46.44 million from staking protocol Lido Finance, according to Lookonchain's data. The trading firm still holds $148 million worth of ETH across Lido Finance and another wallet. Jump reportedly began dumping ETH worth over $400 million on August 2.
ETH technical analysis: Ethereum faces rejection around key trendline again
Ethereum is trading around $2,660 on Wednesday, down 1.7% on the day. In the past 24 hours, ETH has seen over $46.27 million in liquidations, with long and short liquidations accounting for $29.44 million and $16.83 million, respectively.
On the daily time frame, Ethereum attempted to cross above the descending trendline beginning from May 27 but saw a rejection around the $2,799 resistance level. The rejection has seen the short-term bearish view from the trendline hold as it suggests ETH could decline to the swing low between $2,000 and $2,100.
As previously discussed, ETH posted similar moves from August 2022 to November 2022 and July 2023 to October 2023. If history repeats, ETH will fail to break the trendline resistance until September.
ETH/USDT Daily chart
A successful completion of this move could see ETH stage a fresh rally that follows a three-year bullish triangle that began in late 2021. On the upside, ETH faces resistance around the 100-day and 200-day Simple Moving Averages (SMAs) following a "Death Cross" on August 8. A "Death Cross" is considered a bearish divergence signal and occurs when a lower time frame SMA crosses above that of a higher time frame.
The Relative Strength Index is at 40, tilting toward the downside. This suggests that the market is consolidating with a slight bias toward bears.
A daily candlestick close below the lower side of the triangle may invalidate the short-term bearish-bullish outlook.
In the short term, ETH could decline to $2,621, where there's a liquidation wall of $38.33 million.
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Shiba Inu has potential for rally but faces key technical hurdles
Shiba Inu is down 0.1% on Wednesday following loss of a key accumulation zone. Meanwhile, its on-chain and technical indicators suggest potential for a brief rally. According to data from IntoTheBlock, nearly 73% of SHIB tokens are held at a loss.
Trump tokens dip following interview with Elon Musk, Kamala Harris gains support on Polymarket
Meme tokens based on former President Donald Trump experienced sell-offs on Tuesday following no mention of crypto during his interview with Tesla CEO Elon Musk on Monday.
Ethereum risks 25% decline if it fails to overcome key trendline as investor accumulation continues
Ethereum is up more than 2% on Tuesday following minor inflows across ETH ETFs. ETH technical indicators suggest that its price could approach the $2,000 psychological level in the coming weeks, but investors' accumulation may prevail.
Bitcoin shows signs of recovery as Bitgo begins final Mt. Gox distribution
Bitcoin (BTC) is up over 3% on Tuesday as investors reacted positively to the final lap of Mt. Gox supply pressure. Meanwhile, Glassnode data reveals investors have resumed accumulation, hoping to see Bitcoin record higher prices.
Bitcoin: Can BTC bounce back from recent market crash?
Bitcoin (BTC) trades above $60,000 on Friday after a 7.2% decline and a dip below the $50,000 level earlier in the week, following a test of its daily support level at around $49,900 on Monday.