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    Cryptonounce.com
    Home » Why is Ethereum (ETH) price up today?
    Ethereum News

    Why is Ethereum (ETH) price up today?

    AdmincryptBy AdmincryptJanuary 9, 2023No Comments4 Mins Read
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    Ethereum’s native token, Ether (ETH), rose to three-week highs, rallying in lockstep with the broader  cryptocurrency market, as well as stocks. 

    ETH price rises to three-week highs

    On Jan. 9, the ETH’s price rose 2.85% to cross above $1,325 for the first time in three weeks, a key level that could pave the token’s path toward $1,350 next if its previous price performance is any indication.

    The crypto market’s capitalization gained 2.66%, or $21.18 billion, in the same period. 

    ETH/USD daily price chart. Source: TradingView

    Cooling inflation boosts Ethereum price

    Investors are rushing into riskier markets on signs of cooling inflation.

    Notably, on Jan. 6, the U.S. Labor Department’s nonfarm payrolls report showed a slowdown in wage increases, which market watchers interpreted as a sign that the Federal Reserve’s hawkish policy has brought down inflation successfully.

    What’s the price in your national currency? Check out our new cryptocurrency calculator

    Such a scenario could prompt the Fed to slow the pace of its rate hikes, which, in turn, could prove bullish for crypto assets like Ether.

    Inflation will continue to decline in the next few months – this will cause the fed to pause and eventually ease and the markets to roar upwards. Once the fed begins easing we will enter phase 2 of the inflation saga. People really don’t seem to understand how sticky inflation is pic.twitter.com/iFKbUWg9QA

    — Nate O’Brien (@nateobrienn) January 9, 2023

    The market now awaits fresh data on consumer prices in the U.S. due on Jan. 12. The figures will set the tone for the Federal Open Market Committee’s two-day meeting starting Jan. 31. CME data shows a market consensus for a 50-75 basis point rate hike entering February. 

    Ethereum options traders bet on 160% ETH rally

    As macro indicators turn short-term bullish for risk markets, Ethereum options traders have grown confident about a possible price rally in the first quarter of 2023. 

    Cast your vote now!

    Notably, the Ethereum open interest for contracts expiring on Mar. 31 is majority bullish, with most strike targets falling inside the $3,500-$4,000 range, according to data tracked by Glassnode.

    Ethereum options open interest by strike price. Source: Glassnode

    The upside outlook receives a further boost from Jiang Zhuoer, the CEO/co-founder of Bitcoin (BTC) mining service B.TOP, who believes Ether would permanently break out from its current bottom range anywhere between March and May 2023, citing its deflationary supply in recent months.

    Related: Ethereum’s Shanghai upgrade could supercharge liquid staking derivatives — Here’s how

    “Looking at the data of Ethereum, the inflation rate was 3.59% when ETH was in Proof-of-Work (POW). Bitcoin’s inflation rate is 1.72%,” he wrote, adding:

    “Even after the bear market, with the inactive coin burning, the ETH inflation rate is as low as 0.01% […] From this data, it can be concluded that the ETH bull market will start in a spiral deflationary mode.”

    Ethereum supply rate after its network upgrade to proof-of-stake (PoS). Source: Ultrasound.Money

    However, the Fed would need to see a sustained decline in inflation before it puts a brake on its rate-hiking-spree, cautions Edward Park, chief investment officer at London-based Brooks Macdonald.

    $ETH. Bear Market Analysis. Since the high was made in December 2021, price has been moving in a descending channel till date.

    Price is expected to to continue going up from here OR form a double bottom before the next impulse move. #DYOR #NFA pic.twitter.com/roAgsyZXPf

    — The London Crypto  (@SerLondonCrypto) January 9, 2023

    If that does not happen, investors’ risk-on sentiment could dampen again, which could see Ether returning below $1,000 in such a scenario, potentially forming a double bottom. 

    This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.