Ether (ETH) surged 3.5% to near $3,400 on July 29, marking a strong start to the weekly session. This rally follows former President Donald Trump’s significant endorsement of cryptocurrency at the Bitcoin 2024 conference in Nashville, and rising optimism about potential rate cuts ahead of the Federal Reserve meeting.
Trump’s Crypto Advocacy Boosts Market Sentiment
Trump’s speech to the Bitcoin community on July 27 included a proposal for a national strategic Bitcoin reserve, where the US government would hold 100% of its current and future Bitcoin (BTC) assets. Following his address, Republican Senator Cynthia Lummis of Wyoming introduced a bill to have the US Treasury acquire 1 million BTC over five years. This potential shift towards more crypto-friendly policies has buoyed market sentiment, suggesting a brighter future for broader crypto adoption in the U.S.
The impact of Trump’s pro-crypto stance extended beyond the U.S. borders, as Hong Kong Legislative Council Member Johnny Ng revealed plans to explore integrating Bitcoin into the region’s financial reserves. The optimism generated from these developments pushed Bitcoin and the broader crypto market, including Ether, higher.
Fed Rate Cut Speculations Add to Ether’s Rally
Ether’s price rise is further fueled by anticipation of the Federal Reserve’s policy announcement and Chair Jerome Powell’s upcoming remarks on July 31. Market participants are keenly watching for indications of a potential interest-rate cut in September. The Fed’s current benchmark rate of 5.25% to 5.5% is under scrutiny, with notable figures like former New York Fed President William Dudley and economist Mohamed El-Erian advocating for more aggressive rate cuts to prevent policy errors amidst a balanced labor market and declining inflation.
The probability of a September rate cut has climbed to 87.7% from 57.9% a month ago. This shift has led to a decline in yields on US Treasury notes, making riskier, non-yielding assets like Bitcoin and Ether more attractive to investors.
Ethereum Futures and Technical Analysis Indicate Bullish Trends
Ether’s gains today also coincide with Ethereum futures’ funding rates reaching their highest levels since June. As of July 29, funding rates surged to 0.26% per week, up from a month-to-date low of 0.014% per week, indicating increasing bullish sentiment among traders. Open interest in Ether futures, however, has declined to $13.97 billion from a monthly peak of $15.22 billion, suggesting short covering as bearish positions close.
Also Read: Ethereum ETF Unleashes Potential: Altcoins Poised For Massive 15% Rally
Technically, Ether’s (ETH) price rebound began from a key support confluence, including the 200-day exponential moving average (200-day EMA), a 0.236 Fibonacci retracement line, and the lower trendline of its descending channel pattern. Ether is now approaching the channel’s upper trendline around $3,460, coinciding with the 0.5 Fib retracement line. A breakout above this channel could propel the price towards $3,600, while a failure to break out might see Ether retrace to its 200-day EMA.
Conclusion
Trump’s crypto endorsement and growing expectations of Fed rate cuts have injected fresh optimism into the cryptocurrency market, driving Ether’s (ETH) price higher. With supportive technical indicators and improving market sentiment, Ether’s bullish trend appears set to continue, contingent on forthcoming policy developments and market reactions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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