Ethereum (CRYPTO: ETH) was surging over 8% higher on Wednesday, propelled by a positive market-wide reaction to the latest consumer price index data that showed inflation increased 8.5% year-over-year in July, down from 9.1% in June.
The S&P 500 gapped up 1.33% on the news, popping multiple big-tech stocks up to new highs. Bitcoin (CRYPTO: BTC) was trading higher by about 3%, bogged down by a new but fairly heavy resistance level that has developed at $24,206.
The crypto sector, despite being decentralized, has been reacting both negatively and positively to sentiment pertaining to the U.S. economy. The last big bullish move higher in Bitcoin and Ethereum took place in July, when the Federal Reserve raised the benchmark interest rate by 0.75%.
Ethereum gained momentum when the crypto spiked up above Tuesday’s high-of-day, to trade at a level not seen since June 9. The surge higher caused Ethereum to confirm its uptrend by printing another consecutive higher high on the daily chart.
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The Ethereum Chart: Ethereum reversed course into a fairly consistent uptrend on June 30, with the most recent higher low formed during Wednesday’s 24-hour trading session at the $1,656 level and the most recent confirmed higher high printed at $1,818.25 on Aug. 8. When Ethereum printed its higher low on Wednesday, the crypto tested the 21-day exponential moving average (EMA) as support and held above the level, which has been the case each time since July 15.
- If Ethereum closes the 24-hour trading session near its high-of-day price, the crypto will print a bullish engulfing candlestick, which could indicate higher prices will come again during Thursday’s 24-hour session. If the crypto runs into sellers and closes the trading day with a long upper wick, it could indicate the next higher high has been printed and a retracement to the downside is in the cards.
- Ultimately, bulls want to see Ethereum eventually regain the 200-day simple moving average (SMA) as support, which is currently trending over 24% above the crypto’s price. If Ethereum can regain the level, it could indicate crypto winter has come to an end and a new bull cycle is on the horizon.
- Ethereum has resistance above at $1,957 and $2,150 and support below at $1,717 and $1,421.
