The May US Consumer Price Index (CPI) indicated a modest decrease in inflation, dropping to 3.3% from April’s 3.4%. This positively impacted the market, triggering a robust recovery in major crypto assets. Bitcoin’s price is currently heading towards the $70,000 mark. Simultaneously, Ethereum (ETH) has experienced an increase in buying activity and is now challenging significant price levels, accompanied by a rise in on-chain metrics.
Positive CPI News Defended Support Lines
The U.S. Consumer Price Index (CPI) remained unchanged in May, outperforming economist predictions of a 0.1% increase and showing a decrease from April’s 0.3%. Annually, the CPI rose by 3.3%, matching the expectations but slightly below the previous month’s 3.4%.
Excluding food and energy, the core CPI increased by 0.2% in May, surpassing predictions of a 0.3% rise and matching April’s rate. On a year-over-year basis, core CPI advanced to 3.4%, better than the anticipated 3.5% and down from 3.6% in April.
The crypto market welcomed this soft CPI report and BTC price surged toward the high of $70K, with ETH price testing buyers’ patience at $3,700. According to IntoTheBlock data, there’s been a massive surge in the large transaction volume over the last 48 hours as the metric recorded over $13 billion worth of transactions by Ethereum whales.
Also read: Bitcoin Price Breaks $69,400: What’s Fueling the Surge?
This suggests that whales are accumulating ETH near each price in anticipation of a big move, strengthening the volatility. However, Ethereum’s network activity has seen a reduction in specific metrics over the past 90 days. According to Glassnode, the daily active addresses on the Ethereum network have fallen from 622,963 on March 20 to 458,400 on June 10. Moreover, there has been a 1.2% decrease in the last 48 hours alone.
Though Ethereum leads the layer 1 sector, Solana is gaining ground, particularly in on-chain activity. DappRadar data indicates a 9% drop in Ethereum’s NFT volume over the past week to 105 million, potentially accelerating bearish trends for ETH despite a recent price rebound.
What’s Next For ETH Price?
Ethereum is currently on a strong upward trajectory, but it’s encountering resistance around $3,660, indicating potential profit-taking by short-term traders. Buyers successfully pushed the price above immediate Fib channels and are currently aiming for a surge above EMA trend lines. As of writing, ETH price trades at $3,624, surging over 3.3% in the last 24 hours.
Should the price continue its current buying momentum, it would suggest that bulls have successfully converted $3,430 into a support level, enhancing the likelihood of a surge to the target of $3,740. A break might push the price toward the $4K milestone.
Conversely, a downturn is signaled by a break and sustained closure below the $3,430 support. If the price falls below the support line, selling pressure might escalate, potentially leading to a decline towards $3,172.
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