Ethereum surged more than 5% in the past day, climbing above $1,800, after June’s US Consumer Price Index (CPI) figures came in lower than expected, buoying sentiment across digital assets.
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AAPLUS inflation eases, supports crypto rally
The US Bureau of Labor Statistics reported that annual inflation, as measured by the CPI, rose 3.5% in June, 30 basis points below analyst expectations. On a monthly basis, prices fell 0.4%, surpassing the anticipated 0.1% decrease.
Core inflation, which excludes volatile energy prices, also fell by 20 basis points. This release reduced expectations that the Federal Reserve would pursue further interest rate hikes in the near term.
CME Group’s FedWatch tool reflected this shift, with the probability of no rate cut at the September meeting increasing from 25% to 39% during the session. While a majority of participants still expect a rate adjustment, the balance has changed in response to the softer inflation print.
Cryptocurrencies, often seen as risk-on assets, responded positively. Ethereum led the move upward, gaining more than 5% within 24 hours and outperforming major peers.
Liquidations surge as ETH breaks key level
The break above $1,800 triggered a wave of liquidations among traders who had bet against Ethereum. CoinGlass data indicated that about $300 million worth of short contracts were closed out in a single day, with ETH responsible for more than one-third of these positions.
| Asset | Short liquidations |
|---|---|
| Ethereum (ETH) | 1/3 of total, over $100M |
| Bitcoin (BTC) | Slightly less than ETH |
| Others | Remaining amount |
Analyst Ted Pillows observed that Ethereum maintained support above $1,750 before the rally. He noted that buyers consistently defended this area, helping fuel the upward move once the key resistance was breached.
Analyst Ted Pillows explained that holding $1,750 was a strong sign of buyer support and projected further gains if the level held, a scenario that played out as expected.
Trading volumes for ETH jumped by 33% during the same period. Analysts often view a simultaneous rise in price and volume as confirmation of a significant breakout.
Ethereum had previously established a double bottom around $1,550, which served as key support. The $1,800 zone marked the neckline of this technical pattern, and the breakout through this level reinforced the bullish sentiment.
Technical signals suggest further upside
Several technical indicators strengthened the bullish case. The daily Relative Strength Index (RSI) showed a bullish divergence, where selling momentum weakened even as price action trended lower—often seen before trend reversals.
Crypto market analyst Ali Charts highlighted that the SuperTrend indicator turned bullish for Ethereum’s 3-day chart. This signal previously appeared ahead of rallies of 72% and 177% for ETH.
Ali Charts noted that a recent bullish SuperTrend signal on the 3-day chart has historically preceded major Ethereum rallies.
The 200-day exponential moving average (EMA) now sits at $2,200, representing the next key resistance. Should ETH clear this level, analysts are watching $2,400 as an extended price objective, supported by a longer-term buy signal seen on the weekly chart after the RSI dropped below 30.
As of publication time, Ethereum traded around $1,850, maintaining its daily gain above 5% after the inflation-driven rally.
Mini dictionary: SuperTrend indicator – A trend-following technical tool that provides buy or sell signals based on price’s relationship to calculated support and resistance bands. A turn from bearish to bullish is interpreted as a potential start of an uptrend.
