The Ethereum blockchain’s native asset Ether (ETH) reached a new record on Nov. 8. This was supported by a rally among the top cryptocurrencies, ahead of a crucial United Stat inflation report this Wednesday.
ETH’s price climbed by 3.30% over the past 24 hours, to $4,770, for the first time ever in its history. Bitcoin (BTC), meanwhile, reclaimed $66,000, demonstrating strong correlation between these two digital assets.
Based on data from the last 24 hours, this table shows the correlation between cryptocurrencies. Source: Crypto Watch
Inflationary pressure is back
Wall Street analysts predicted that the U.S. Consumer Price Index would rise to 5.8% in October, ahead of Wednesday’s Bureau of Labor Statistics inflation report. This would be a significant increase from the September 5.4% pace, which was the highest recorded since 1990.
Bloomberg also observed consensus forecasts that U.S. consumer prices would rise 0.6% between September-October, up from 0.4% in August-September.
U.S. headline inflation Source: Bloomberg, Bureau of Labor Statistics
After the Federal Reserve’s last week policy meeting, the latest inflation figures were released. To control the rising consumer prices and bring them down below its 2% target, the U.S. central banking decided to end its $120-billion-per-month asset-purchase programme.
However, Fed officials remained true to their long-term view of inflation as “transitory” and decided to maintain their benchmark interest rates at zero. Given Bitcoin’s high returns during periods of low interest rates and large bond-buying, this kept Bitcoin’s bullish momentum intact.
Technicals for the price of ETH
Technical analysis for Ether supported an upside outlook. The price trend was eying a run up toward its resistance trendline, which is near the $4,800-$5,000 region.
Daily price chart for ETH/USD with its ascending channel configuration. Source: TradingView
Ether’s profit target was also increased to $4,800 by the bull flag breakout setup.
Bernhard Rzymelka is the global markets managing director at Goldman Sachs. He expects Ether will reach $8,000 by December 2021, if it keeps up with inflation expectations.
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