Ethereum (ETH) has trimmed its weekly losses to less than 3% as investors’ sentiment appears to be shifting ahead of today’s inflation report.
Yesterday, exchange-traded funds (ETFs) linked to the top altcoin experienced their first positive net inflow in 11 days.
Investors poured $25 million into these vehicles during a session that saw ETH jump by 2%. Although this mild gain may not justify this change in sentiment, it was a technically relevant price movement, as Ethereum bounced off a key support at $2,400.
However, monthly net inflows are still neck-deep in negative territory, with investors withdrawing nearly $700 million thus far in October.
Odds of a Rate Hike in October Sit Tight at 22% Ahead of Today’s CPI Report
Today’s U.S. inflation report could shake things up after a few days of stalled volumes. Analysts expect a 10 basis point retreat in core inflation, but also envision a 20 basis point jump in the annualized figure for the consumer price index (CPI).
Higher oil prices continue to have a strong influence on how prices behave, and analysts’ expectations regarding monetary policy could probably change depending on today’s report.
Right now, the odds of a rate hike during the October FOMC meeting sit at 22%, following a cooler-than-expected PCE Price Index report a couple of weeks ago. An increase in these odds, following the release of today’s inflation print, could catalyze a strong decline in crypto prices.
October has typically been a good month for Ethereum, as the token has finished with gains in 6 out of the last 10 years. Hence, we continue to be bullish regarding the short-term and mid-term outlook for the top altcoin, especially after this recent bounce off the $2,400 area.
The latest pullback from the $2,800 resistance was expected, as the market needed a breather following the strong rally it experienced between September 15 and September 21.
Until otherwise confirmed, ETH is still in a bull market, as the price continues to sit 9% above its 200-day exponential moving average (EMA).
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See all Ethereum forecastsEthereum DEX Volumes and App Fees Continue to Rise
We have been seeing a steady increase in a couple of key on-chain metrics since July, indicating higher activity within the Ethereum ecosystem.
DEX volumes have jumped from $30.6 billion by the end of that month to $41.5 billion in September, resulting in a 36% increase. Meanwhile, app fees rose from $200 million to $246 million during that same period.
Paired with the buy signals we have discussed in previous Ethereum price prediction articles, most technical and on-chain metrics indicate that the token could be in the earliest stage of a bullish cycle.
Turning to the daily chart, our baseline scenario continues to be bullish. We see ETH rising back to $2,800 in the next few weeks as long as the token manages to stay above a couple of key support levels.
The first of those is the $2.4K demand zone, while the second one would be the 200-day EMA, which currently sits at $2,300.
Today’s inflation report could unlock some liquidity by tapping into areas of high demand or supply at lower time frames. Hence, we expect a spike in volume after the numbers come out.
