Why is Ethereum (ETH) price up today?

ETH CRYPTO_NEWS

Ethereum's price is up today, with most options traders anticipating a run toward $3,500 to $4,000 before April 2023. 

 

Ethereum’s native token, Ether, rose to three-week highs, rallying in lockstep with the broader cryptocurrency market, as well as stocks. 

 

ETH price rises to three-week highs

On Jan. 9, ETH’s price rose 2.85% to cross above $1,325 for the first time in three weeks, a key level that could pave the coin’s path toward $1,350 next if its previous price performance is any indication.

The crypto market's capitalization gained 2.66%, or $21.18 billion, in the same period. 

 

Cooling inflation boosts Ether price

Investors are rushing into riskier markets on signs of cooling inflation.

Notably, on Jan. 6, the U.S. Labor Department’s nonfarm payrolls report showed a slowdown in wage increases, which market watchers interpreted as a sign that the Federal Reserve’s hawkish policy has brought down inflation successfully.

 

Such a scenario could prompt the Fed to slow the pace of its rate hikes, which, in turn, could prove bullish for crypto assets like Ether.

 

The market now awaits fresh data on consumer prices in the U.S. due on Jan. 12. The figures will set the tone for the Federal Open Market Committee’s two-day meeting starting Jan. 31. CME data shows a market consensus for a rate hike of 50 to 75 basis points entering February. 

 

Ether options traders bet on 160% ETH rally

As macro indicators turn short-term bullish for risk markets, Ether options traders have grown confident about a possible price rally in the first quarter of 2023.

Notably, the Ether open interest for contracts expiring on March 31 is majority bullish, with most strike targets falling inside the $3,500–$4,000 range, according to data tracked by Glassnode.

Ether options open interest by strike price. Source: Glassnode

The upside outlook receives a further boost from Jiang Zhuoer, co-founder and CEO of Bitcoin mining service B.TOP, who believes Ether will permanently break out from its current bottom range anywhere between March and May 2023, citing its deflationary supply in recent months.

 

“Looking at the data of Ethereum, the inflation rate was 3.59% when ETH was in Proof-of-Work (POW). Bitcoin’s inflation rate is 1.72%,” he wrote, adding:

“Even after the bear market, with the inactive coin burning, the ETH inflation rate is as low as 0.01%. [...] From this data, it can be concluded that the ETH bull market will start in a spiral deflationary mode.”

Ethereum supply rate after its network upgrade to proof-of-stake. Source: Ultra Sound Money

However, the Fed will need to see a sustained decline in inflation before it puts a brake on its rate-hiking-spree, cautioned Edward Park, chief investment officer at London-based Brooks Macdonald.

 

If that does not happen, investors’ risk-on sentiment could dampen again, which could see Ether returning below $1,000 in such a scenario, potentially forming a double bottom. 

 

Source : [Why is Ethereum (ETH) price up today?](cointelegraph.com/news/why-is-ethereum-eth-price-up-today) by Cointelegraph By Yashu Gola - ETH Price•200+Cointelegraph by Cointelegraph By Yashu Gola / January 09, 2023

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