Why is Ethereum (ETH) price up today?

1 week ago 5

Ethereum’s native token, Ether (ETH), has risen by more than 7.50% in the last 24 hours to reach around $3,940 on Dec. 12.

The jump occurred alongside Bitcoin’s (BTC) return above the $100,000 level, driven by United States economic data hinting at a possible rate cut in December.

Cryptocurrencies, Markets, Market Analysis, Ether Price, Ethereum Price

US inflation data boosts Ethereum price

Ether rallied following a favorable inflation report that reinforced expectations of continued interest rate cuts by the Federal Reserve.

The Consumer Price Index (CPI) increased by 0.3% in November, marking the fourth consecutive month of similar growth, according to data released Wednesday by the Bureau of Labor Statistics.

The core CPI, which excludes volatile food and energy prices and is closely watched by economists, also rose 0.3%, aligning with expectations. On an annual basis, the core measure was up 3.3%, matching consensus forecasts.

Traders increased their bets for a 25 basis points rate cut in December from 97.5% to 98.6% a day after CPI release, according to CME data.

Lower rates reduce the opportunity cost of holding yield-bearing assets, which boosts the market’s appetite for riskier assets like Ether, Bitcoin, and even US stocks.

Ethereum spot ETFs see record inflows

Today, Ether’s price rally follows two weeks of continuous inflows into US-based Spot Ethereum exchange-traded funds (ETF).

Since Nov. 21, Ethereum ETFs have not witnessed a single day of net outflow, attracting $1.67 worth of capital instead, which took their combined assets under management to a record high of $1.98 billion on Dec. 12.

The steady inflow of capital into Ethereum ETFs signals heightened institutional and retail interest in Ether.

Donald Trump’s crypto project buys $10M in ETH

Ether’s price climb further coincides with the World Liberty Financial Initiative’s (WLFI) acquisition of $12 million worth of cryptocurrencies. WLFI is a DeFi project associated with US President-elect Donald Trump.

On Dec. 12, blockchain analytics firm Lookonchain reported that WLFI purchased 2,631 ETH for $10 million at an average price of $3,801 per token. The project also invested $1 million each in 41,335 LINK and 3,357 AAVE.

Data from Arkham Intellige nce shows these acquisitions have increased WLFI’s total crypto holdings to over $74.7 million.

The project now holds approximately 14,576 ETH (worth over $57 million), 102.9 cbBTC (valued at $10.3 million), and various other assets, including USDC, LINK, and AAVE.

WLFI’s significant crypto purchases appear to have had an impact on market sentiment, contributing to upward price momentum across the assets involved, including Ether.

Ethereum may cross $5,000 next

Ether’s ongoing price rally appears to be part of the breakout stage of its prevailing cup-and-handle pattern.

The cup-and-handle pattern is characterized by a rounded bottom (the "cup") followed by a consolidation phase (the "handle") before a decisive breakout above the resistance level.

In Ether’s case, the resistance at $3,340.50 acted as the neckline of the pattern, capping the price for months before the breakout in late November. The rally since then has propelled ETH prices to around $3,923 as of Dec. 12.

The textbook breakout target for a cup-and-handle pattern is calculated by adding the depth of the cup to the neckline resistance. For ETH, the depth of the cup spans approximately $1,780, suggesting a potential upside target of $5,120 by December.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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