Ethereum (ETH / USD) continued its uptrend as investors reacted to the relatively weak US inflation data. The price rose to $ 3,278, the highest since May 19. As a result, the market value of all Ether tokens rose by more than $ 378 billion.
Ethereum surge is accelerating
Ether is the second largest cryptocurrency in the world after Bitcoin. The token powers the Ethereum ecosystem, which enables developers to develop high quality decentralized applications. Today most of the famous cryptocurrency projects like Aave, Maker and Uniswap are developed using Ethereum technology.
Are you looking for quick news, hot tips, and market research? Then sign up for the Invezz newsletter today.
Ethereum’s price surge accelerated overnight after it was revealed that consumer prices in the US had fallen. According to the Ministry of Labor, the headline CPI remained unchanged at 5.4% year-on-year. However, it fell slightly compared to the previous month.
The CPI includes everything including food, energy, clothing, and furniture. Over the same period, the core CPI excluding food and energy declined from 4.5% in June to 4.3% in July.
Inflation plays an important role in cryptocurrency prices. On the one hand, it is part of the dual mandate of the US Federal Reserve. That simply means that the Federal Reserve takes both inflation and the unemployment rate into account when making its decision.
With inflation rising and the unemployment rate higher than before the pandemic, there is a chance the bank will maintain its loose monetary policy.
The Ethereum price has also rebounded due to the overall performance of the decentralized finance (DeFi) industry. This week the total value of the industry has surged to more than $ 80 billion.
This is noteworthy as the industry’s value fell below $ 45 billion during the crypto sell-off. This is also important considering that most DeFi projects are built using Ethereum’s technology.
Ethereum price prediction
The 3-hour chart shows that the ETH price has been in a strong upward trend in the past few weeks. It has actually moved in a straight line, around 87% above its July low. As a result, the uptrend is supported by the 25- and 50-day moving averages.
Most importantly, the coin has increased in volume, which is usually a positive thing. In addition, the price is supported by the rising trend line shown in black. As such, the pair is likely to continue rising as the bulls target key resistance at $ 3,000.
Invest in crypto, stocks, ETFs & more in minutes with our preferred broker,
67% of retail investor CFD accounts lose money