Two days ago, Ethereum was able to break the key resistance of $ 3,000. There are now key metrics that show Ethereum could reach $ 6,000 in the coming months.
to the Report Coin Telegraph, Ethereum could double its price in the coming months, thanks to a combination of technical and fundamental support indicators.
Ethereum prices rose more than 9 percent on Friday, reaching $ 3,330 for the first time in 10 days. This uptrend coincided with the jump in the prices of other major currencies in the market, including Bitcoin. Last Friday, Bitcoin experienced a 9.5 percent growth and managed to cross $ 48,000 for the first time in the last 10 days.
Ethereum and Bitcoin correlate with US inflation
The digital currency market jumped on Friday as the US Commerce Department released a report on “consumer spending”. Consumer costs generally refer to the amount of money that individuals and households pay to use goods and services.
The report shows that the Consumer Cost Index (PCE), the US Federal Reserve’s preferred measure of inflation, grew 0.3 percent in August to 3.6 percent from a year earlier. The percentage has increased. Based on these data, it can be said that the US core inflation rate has reached its highest level in the last 30 years.
Short-term traders tend to use bitcoin as a shield against inflation, which justifies the bitcoin market’s response to rising consumer spending in the United States.
Data from the CryptoWatch website show that the correlation between Ethereum and Bitcoin price performance over the past 30 days has been 89%, which means that Ethereum is almost on the same footing as Bitcoin.
The University of Michigan conducted a poll between August 25 (September 3) and September 27 (October 5) which shows that the long-term forecast of American consumers for inflation has reached 3%. This is the highest rate in a decade.
The results of this poll are contrary to the views of Jerome Powell, the Governor of the US Federal Reserve. Describing the rise in monthly inflation as transient, he said at a recent Senate meeting that the recent rise in US consumer spending could remain unchanged until at least next year.
As a result, rising inflationary pressures could be a reason for buyers to invest in bitcoin to combat inflation. Michael Saylor, CEO of MicroStrategy, also recently suggested to large companies that they convert their cash in their coffers into bitcoins.
Microstrategy now accounts for about 0.5 percent of Bitcoin’s turnover, which is valued at about $ 6 billion at current prices.
The principle of supply and demand
Ethereum Network Update on August 5 (August 14) has given an upward perspective to the market of this digital currency, and this upward perspective depends on the principle of supply and demand.
Hardfork London has added a new recovery plan, EIP-1559, to the Ethereum network, in which part of the network fee is set as the base fee and burned. Recent data show that 410,404 Ethereums, or $ 1.32 billion, have been permanently out of the network.
Ethereum is now preparing the necessary infrastructure to move its consensus mechanism from proof-of-work to proof-of-stock. That’s why it has launched a stock pool that allows users to lock 32 Ethereum units in smart proof contracts for a fixed period of time and increase their Ethereum inventory by receiving rewards.
The volume of Ethereum shares in smart contracts of the second version of Ethereum has reached 7.82 million units from about 11,500 units in November 2020 (November 99). It is said that 7.82 million Ethereum shares have been temporarily removed from the network cycle of this digital currency.
On the other hand, the Ethereum inventory of digital currency exchanges has reached its lowest level in history. Data from CryptoQuant, an analytics website, show that there are currently only 18.1 million Ethereums in exchange offices, up from 23.73 million units at Ethereum last year.
The declining inventory of digital currency exchanges shows that traders may prefer to keep their Ethereums rather than sell them. Ethereum has a chance to become more valuable than ever before, as new investors may continue to face a decline in supply.
Lark Davis, a leading digital currency market analyst, said:
With the implementation of EIP-1559, the total supply of Ethereum is likely to peak at 120 million units and then become less and less. At the same time, demand is rising, and it certainly is [قیمت] It goes higher.
Cup and handle pattern
Decreased supply and subsequent increase in demand act as support for Ethereum prices. The formation of the cup and handle pattern in the long-term views of the Ethereum market also indicates an upward price jump.
The cup and handle is an ascending pattern that consists of a round section (cup) and a descending channel (handle) as shown in the diagram below. The goal of this pattern is usually to measure the distance between the bottom and the top of the cup, meaning that the price increases by the height of the cup as it exits the descending channel.
Given that the resistance of this pattern is close to the $ 4,000 level, breaking this level could bring the price of Ethereum up to $ 6,000, which is almost twice the current price.