The price of Ethereum has found strong resistance ahead of Wednesday’s scheduled release of US Consumer Price Index (CPI) data. The ETH token is currently priced at $3,460, down about 5.78% from this month’s high. Its total market cap has fallen to just over $407 billion in the process.
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Divergence Between Ethereum and Bitcoin
Historically, there has been a close correlation between Bitcoin and Ethereum. Therefore, the ETH price rises when there is strong demand for BTC.
However, this correlation could not be observed this week. On Monday, October 11th, the price of Bitcoin jumped to a five-month high of $57,000. During the same period, Ethereum remained under pressure below the key resistance level of $35,000. This divergence also occurred between Bitcoin and other altcoins.
This is due to the factors driving Bitcoin. In recent weeks, Bitcoin has jumped because the U.S. Securities and Exchange Commission (SEC) may approve a Bitcoin exchange-traded fund (ETF). If it does, more companies may apply for Ethereum ETF approval after that.
The price increase is also due to the rising hash rates. This means that there are no more miners. A few months ago, the hash rate declined after China tightened its crackdown on mining.
Consumer price data also plays a role
The next important catalyst for the ETH price will be the latest US consumer inflation data. They should not be released until Wednesday. It is likely that the data will show that consumer prices in the US remained at a high level in September. Therefore, there is a probability that the US Federal Reserve will start tightening monetary policy sooner than expected.
At the same time, the Ethereum price is supported by the DeFI and NFT sectors. For example, the total value of locked tokens on Ethereum’s DeFi platforms has risen to over $140 billion. Activity in the NFT industry also continues to increase.
Ethereum Price Forecast
From the four-hour chart, it can be seen that Ethereum has been struggling in recent days. A closer look shows that this price movement is happening intentionally. For one, it happened when the price rose to a high of $3,675. This was notable because it was also the September 16th price.
The price formed a kind of cup-and-handle pattern. This is also part of the handle formation, which means that ETH will recover soon.
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