Ethereum (ETH) has gone up by 5% in the past 24 hours, following a strong bounce off the $2,400 level — a former area of resistance that seems to have turned into a support level now.
Despite some potential headwinds on the macro backdrop, the crypto market has managed to defend these critical price zones.
On Wednesday and Thursday, both the Consumer Price Index (CPI) and the Producer Price Index (PPI) in the United States surprised analysts by exceeding their estimates for September.
The most alarming data point was a 0.7% increase in the Core PPI on a month-on-month basis. This metric excludes the impact of higher energy prices directly but shows that this phenomenon is nonetheless impacting the wholesale price of goods within the U.S. economy.
However, even though inflation is accelerating, the market did not change its projection for the Fed’s interest rate decision this month. Odds of a rate hike during the FOMC meeting scheduled for October 28 actually declined from 22% before the reports came out to 17% at the time of writing.
This may have given the markets the necessary confidence to buy Ethereum (ETH) and other altcoins as they hit key support areas.
Wall Street Shunned Ethereum (ETH) in October
ETH’s rebound in the past couple of days could mark the beginning of its recovery and the end of this latest, and much-needed, pullback. Trading volumes remain high at $14 billion, currently accounting for 4.6% of the token’s circulating market cap.
That said, we still need to see an improvement in Wall Street’s sentiment toward the token, as exchange-traded funds (ETFs) linked to the top altcoin have experienced net outflows in 12 out of the last 13 sessions.
In total, investors have withdrawn $885 million from these vehicles, indicating an ongoing profit-taking move, but not necessarily marking the end of this bull market, as this key support area at $2,400 held strong.
We continue to monitor the two buy signals we have shared in previous articles, associated with ETH’s trading volumes and an on-chain metric called the MVRV Ratio.
These two continue to be in bull market territory. Hence, we see this latest decline in the price as a healthy pullback that could actually present an opportunity for late buyers to enter the rally at an advantageous price point.
Ethereum Price Forecast
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See all Ethereum forecastsETH Could Rise to $3,400 If a Trend Reversal is Confirmed
Turning to the daily chart, we can see a clear liquidity grab as ETH dropped to its 200-day exponential moving average (EMA) and quickly recovered until closing above the $2,400 mark.
Trading volumes were above the average on that day, also indicating that the buying pressure was significant. This confirms the technical relevance of this price zone and may set the stage for the beginning of ETH’s recovery.
The Relative Strength Index (RSI) also seems poised to move above the signal line, which is typically considered an early buy signal during bullish price expansions. Paired with this strong rebound off a key support, the RSI may provide another piece of supporting evidence that this latest pullback has ended.
We would like to see the token rising past $2,600 to confirm a trend reversal and begin its ascent toward a retest of the $2,800 resistance first and then to our mid-term target of $3,400.
