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As the king of altcoins, Ethereum (ETH) remained at a similar level compared to yesterday. With Bitcoin also trading within a narrow range, the markets have become increasingly dull for investors. Despite yesterday’s Fed meeting, the sideways movement continues. So, what are the short-term expectations?
Ethereum (ETH)
When the US Federal Reserve last raised interest rates in May 2023, the price of Ethereum (ETH) increased by 10%. However, despite the new interest rate hike, the price has remained stagnant. On July 26th, the US Fed announced another 25 basis point interest rate hike. Historical price data reveals that ETH has experienced significant gains after the last two interest rate hikes on March 22nd and May 3rd, 2023.
On-chain data shows that Ethereum investors have shown some signs of bullishness since market indicators pointed to an interest rate hike this week. According to Santiment, Ethereum’s exchange supply hit its lowest level in 5 years on July 17th, with 11.07 million ETH. As exchange supply and trading activity dried up, the altcoin king fluctuated between $1,850 and $1,890.
Current Analysis of ETH
On July 22nd, there were 1.14 million ETH transactions on the Ethereum network. However, as of July 27th, the daily transaction volume gradually increased to 1.88 million ETH. This represents a 65% increase in transaction activity just this week.
Transaction volume evaluates changes in network activity by summing up the number of tokens traded across the network on a given day. As observed above, an increase indicates rising economic activity. Given its correlation with Fed interest rate hikes, it could be an indicator of another ETH price surge. If ETH enters a rally of 5% to 10%, similar to the previous rate increases in March and May 2023, it could surpass $2,000 again.
Although unlikely, if the price of Ethereum were to drop below $1,800, the bullish expectation could reverse. In this scenario, the next target would be $1,750. It seems that the altcoin king will continue to trade sideways for a while longer, largely dependent on the direction of Bitcoin’s price.
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