Ethereum leads crypto rebound, ETH price heads towards $1500
Crypto market finally shows relief after days in consolidation mode; Ethereum leads the market with significant gains on lower timeframes. The second crypto by market capitalization regains its position as the market leader. The last time ETH’s price showed this price action was in September before “The Merge”.
At the time of writing, Ethereum is trading at $1,460 with a gain of 10% in the last 24 hours and seven days respectively. In the crypto top 10 by market cap, other cryptocurrencies follow ETH and trade in the green for the first time in weeks.
What’s Driving Ethereum Higher?
The rise in the crypto market is driven by a decline in the US dollar, as measured by the DXY index. The currency was at a two-decade high due to current macroeconomic conditions, but at 114 it was finally rejected.
Over the past few weeks, the DXY has trended higher, pushing other assets into support, including macro assets considered safe havens, such as gold. In particular, it was the currencies of US allies, Japan, the UK and the EU, that suffered from this dollar rise.
The US faced pressure from its allies to ease the stress on their economies. Three weeks ago, the United Nations (UN) asked the US central bank (Fed) to change its monetary policy and stop interest rate increases.
Since then, some Fed officials have hinted at a potentially less aggressive monetary policy, which may have triggered weakness in the DXY index. The chart above shows that the currency broke its bullish trend line and may be preparing to retest support around 109.
This decline could allow Ethereum to extend its bullish momentum and regain the area north of $1,500. Data from research firm Santiment, the bullish momentum carried over to other asset classes. Via Twitter, the company wrote:
Ethereum has surged to $1,415 on a Tuesday for #crypto. The value of the dollar has dropped quite remarkably today, and its growth coming to an end (or at least a pause) will be a key component to the next breakout of cryptocurrency market capitalization.
Flipping In The Making
The upside movement makes market sentiment more optimistic. Some experts expect the bullish momentum to extend, with Bitcoin and Ethereum facing significant resistance levels at $20,500 and $1,500 respectively.
Economist Michaël van de Poppe made a bullish prediction for Ethereum. The experts advise traders not to chase the current move on lower time frames.
If bulls have conviction, price action is poised to retest previous levels before regaining lost territory north of $1,500. Late longs can suffer in this process.
In the long term, van de Poppe predicted:
Ethereum broke a ton of levels with this huge move. Great grab at $1320 inducing continuation towards $1500. Ethereum will topple Bitcoin this cycle, but now is not the time to chase. Looking for some healthy corrections to play the next move to $1600.
