Ethereum Breaks Out of Month-Long Range

Favorable broader conditions situations seem to have at last pushed Ethereum past the $1,400 price mark.

Key Takeaways

*Ethereum broke out of today range and is currently trading for $15,50.
*Strong stock indices and a weak dollar may have made way for the coin to pump.
*Ethereum’s deflationary monetary system may also have had an influence.

Ethereum briefly touched $1,550 today as it broke out of the tight range it had been trading inside since mid-September.

Setting the Stage for a Rally

Ethereum is picking up few tailwinds.

The second biggest cryptocurrency is currently trading for $1,550, up 9.5% as of now, according to CoinGecko. The coin had been stuck in a range between approximately $1,405 and $1,240 for over a month now. While it’s too early to tell whether ETH has broken out of that range for any sustained period, it’s whenever the currency first has visited these price levels since the historic Merge on September 15.

ETH’s bounce is probably attributable to broader market circumstances. The S&P 500, Nasdaq, and Dow Jones are green for the third day in a row, having increased in price by 1.32%, 1.86%,and0.86%, respectively. The crypto market has shown a close correlation to the stock market for the majority of the year; in the last month, it proved significantly stronger, as every one of the three of the major U.S. equity indices made new lows in mid-October, while Bitcoin and Ethereum stubbornly remained confined inside their ranges.

ETH’s bounce is probably attributable to broader market circumstances. The S&P 500, Nasdaq, and Dow Jones are green for the third day in a row, having increased in price by 1.32%, 1.86%, and 0.86%, respectively. The crypto market has shown a close correlation to the stock market for the majority of the year; in the last month, it proved significantly stronger, as every one of the three of the major U.S. equity indices made new lows in mid-October, while Bitcoin and Ethereum stubbornly remained confined inside their ranges.

Nevertheless, macro conditions are by all accounts not the only thing propelling Ethereum forward. Open Interest for ETH also flooded dramatically as of now. According to crypto research platform Delphi Digital, almost $500 million in ETH perpetual futures contracts were bought on Coinbase in less than 60 minutes, which quickly led prices to siphon from $1,350 to $1,380.

Finally, ETH may be benefiting from a reduction in its all out supply. Indeed, even after it transitioned to Proof-of-Stake, Ethereum’s ETH emissions kept surging, with data from ultrasound.money showing that by October 8, ETH’s absolute supply had expanded by 13,086 tokens in 23 days. However, heightened on-chain activity has led to the blockchain’s monetary policy becoming deflationary, and ETH’s all out supply is presently near what it used to be on September 15.