ETH Edging Higher

The rally in crypto assets is turning into one of the hottest stories in markets as we kick off Q2. Following the heavy liquidations which took place last year and a tricky start to the year around plenty of negative news flow, crypto is seeing a surge in demand currently. Along with the breakout we’ve seen in Bitcoin, Ethereum is now starting to gather strong upside momentum with ETH futures breaking above the 2025.5 level for the first time in a year. The market has been stuck in a heavy side-ways range since July last year, oscillating between support at the 986 level and resistance at 2025.5. However, with price now testing above the range top, the outlook has turned firmly bullish.

Shifting US Rates Outlook

The key driver behind the move has been the sharp shift in the US rates outlook. While Fed rate projection had turned firmly hawkish back in January, just a few months forward the outlook has completely reversed with the market now pricing in rate cuts later in the year in line with growing recession risks. Against this backdrop, a falling US Dollar is creating plenty of support for crypto and should see further gains today and into next week if today’s retail sales data confirms a drop in spending.

Technical Views

ETH

The rally in ETH this year has seen price blowing through resistance at the 1695.5 level with price this week testing above the 2025.5 level for the first time since early last year. This is a key area of the market and while price holds above here, the focus is on a further push higher towards the 2422 level next, in line with bullish momentum studies readings.