Key Takeaways
- June U.S. inflation figures registered at 3.5%, falling short of market forecasts and energizing cryptocurrency markets
- Ethereum climbed more than 5% within a 24-hour window, surpassing the critical $1,800 threshold
- Short liquidations reached approximately $300 million, with Ethereum representing more than one-third of the total
- Technical analyst Ali Charts highlights that the SuperTrend indicator has flipped bullish on Ethereum’s 3-day timeframe
- The 200-day exponential moving average near $2,200 represents the next significant hurdle, with analysts eyeing $2,400 as the extended goal
Ethereum has experienced a remarkable rally exceeding 5% over the past day following the release of softer-than-anticipated U.S. inflation figures for June.
The Consumer Price Index registered a 3.5% year-over-year increase for June, coming in 30 basis points lower than market projections. On a monthly basis, prices declined 0.4%, surpassing the 0.1% decrease that economists had anticipated.
Core inflation metrics, which exclude volatile energy components, also retreated by 20 basis points. This development is significant as it reduces pressure on the Federal Reserve to implement additional interest rate increases.
According to CME FedWatch data, the probability of no rate adjustment in September climbed from 25% to 39% within just 24 hours. Although 61% of market observers still anticipate a rate modification, this shift signals an evolving macroeconomic landscape.
Risk-oriented assets such as cryptocurrencies typically perform favorably when rate hike probabilities diminish. Ethereum emerged as one of Monday’s primary beneficiaries.
Massive Short Liquidation Event
Ethereum’s breakthrough above $1,800—a crucial resistance threshold—unleashed a cascade of short position liquidations. CoinGlass data reveals that approximately $300 million in short positions were eliminated within a 24-hour span.
Ethereum accounted for over a third of these liquidations, briefly exceeding Bitcoin’s share. This indicates the substantial number of traders who had positioned themselves against ETH at that price point.
Market analyst Ted Pillows observed that Ethereum had maintained support above the $1,750 zone prior to the breakout. He emphasized that buyers were consistently entering at that level, and maintaining that support suggested the subsequent significant movement would likely be upward. The support level proved resilient, and the anticipated move materialized.
Ethereum’s trading volume simultaneously increased by 33% during this period. Elevated volume accompanying a price breakout is typically interpreted as a more robust signal than price action in isolation.
Prior to this rally, ETH had established a double bottom formation at $1,550. That support zone held firm on two separate occasions, generating a powerful rebound. The $1,800 mark served as the neckline of this pattern—and Ethereum successfully breached it.
Technical Indicators Point to Further Upside
The daily Relative Strength Index also displayed a bullish divergence preceding this movement. While price declined, selling momentum weakened. This configuration frequently emerges before trend reversals.
Cryptocurrency analyst Ali Charts identified another significant technical development during this timeframe. He observed that the SuperTrend indicator had recently shifted to bullish territory on Ethereum’s 3-day chart. He referenced that the previous two occurrences of this signal preceded rallies of 72% and 177%, respectively.
The 200-day exponential moving average is currently positioned around $2,200. This represents the next critical level that bullish traders are monitoring.
Should Ethereum successfully breach $2,200, the subsequent target becomes $2,400. This price level coincides with a long-term buy signal on the weekly chart, which emerged following the RSI declining below 30.
At press time, ETH was trading near $1,850, representing a gain of more than 5% for the day.
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