After relatively-high volatility earlier this week, with Ethereum prices trading in the $1,400 – $1,500 range, ETH and BTC saw substantial price growth today, pushing ETHUSD to $1,600. The global crypto market is again safely above the $1 trillion market cap, and the bulls are taking control of the markets.
Why Is Ethereum Price Rising?
One reason for Ethereum’s positive price action today is the announcement by the Fed that they will start to slow further rate hikes to “create some slack.”
After raising interest rates by another 75 basis points, the current borrowing range of 2.25-2.5% impacts the rates at which banks can charge for loans and cascades into a substantial impact on a wide range of consumer products.
During a July 27th Press Conference opening statement, Chair of the Federal Reserve, Jerome Powell, said:
“As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation.”
Powell clarified that the Fed focuses on creating balance in the economy and bringing inflation back down to the 2% range.
“Our overarching focus is using our tools to bring demand into better balance with supply in order to bring inflation back down to our 2 percent goal and to keep longer-term inflation expectations well anchored.”
Since the markets were prepared for the rate hike, it didn’t come as a surprise and didn’t affect prices negatively. Instead, the market decided to focus on Powell’s statements regarding the Fed’s upcoming slowing of pace with rate hikes and monetary policy, causing prices to jump several percent.
Stock market price action is relevant to Bitcoin and Ethereum prices since Bitcoin follows the stock market, and Ethereum likes to amplify BTC’s movements. As such, we’re seeing substantial bullish momentum in response to the Fed’s recent news.
Will Ethereum’s Price Continue to Rise?
Whether the current bull run will last is up for debate, but the sharp increase in the 24-hour trading volume is an excellent sign that the crypto market may remain in the green throughout the weekend.
In the past 24 hours, Ethereum’s 24-hour trading volume saw an increase of 50%, compared to Bitcoin’s 40%. A sharp rise in trading volume combined with an upwards correction suggests buying pressure could keep pushing prices higher.
With the 24-hour trading volume continuing to increase and ETH surpassing $1,600, the short-term sentiment for ETHUSD is bullish, and the crypto asset could test the $1,700 resistance level by the weekend.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any service.
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