Factors that could propel Ethereum’s price to a 100 percent increase in Q4. As Ethereum’s native coin, Ether, three optimistic indicators converge. On Oct. 1, it rises over 9% to cross $3,000, a psychological hurdle level.
Ether (ETH), Ethereum’s native token, has the potential to double in value. In the coming months, due to a slew of positive technical and fundamental signs.
On Oct. 1, the price of Ether increased by more than 9%, reaching above $3,300 for the first time in ten days. Its gains came as a result of a price resurgence across all major cryptocurrencies. Bitcoin (BTC) rose 9.5 percent to $48,000, its highest level in ten days.
Ether-Bitcoin Correlation against rising U.S. Inflation
The crypto market’s surge on Oct. 1 coincided with the release of a report. On consumer expenditure by the US Commerce Department.
The Federal Reserve’s preferred gauge of inflation, the core personal consumption expenditures price index. Climbed 0.3 percent in August and was up 3.6 percent year-over-year, according to the statistics. As a result, core inflation reached its highest level in 30 years.
Bitcoin is commonly used by speculators as an inflation hedge. Which explains the benchmark cryptocurrency’s recent reaction. To rising consumer prices in the United States.
Meanwhile, according to CryptoWatch, Ether’s 30-day average correlation with Bitcoin is near 0.89. Resulting in ETH moving practically in lockstep with BTC.
A University of Michigan Survey
Longer-term inflation forecasts among US consumers jumped to 3%. The highest level in a decade, according to a University of Michigan study. Conducted between August 25 and September 27.
The result looked to be at odds with Federal Reserve Chairman Jerome Powell’s views. Who had previously labeled increasing inflation as “transitory” but stated during a recent Senate hearing. Higher consumer prices may persist at least until next year.
As a result, inflationary pressures prompted crypto bulls to promote Bitcoin as the ultimate hedge. With MicroStrategy CEO Michael Saylor recommending that businesses change their cash-based treasuries to BTC.
MicroStrategy currently owns approximately 0.5 percent of the total Bitcoin supply, which is valued at more than $6 billion.
Due to the traditional law of supply and demand, Ethereum underwent a network hard fork upgrade on Aug. 5. Boosting the factors that could have a positive outlook for Ether even more.
The upgrade, dubbed the London hard fork, included EIP-1559. An improvement protocol that started the burning of a portion of Ethereum’s network charge, known as the base fee. According to Watch the Burn, EIP-1559’s activation has permanently removed 410,404 ETH (about $1.32 billion) from active supply.
Ethereum is also planning to migrate from proof-of-work (PoW) to proof-of-stake. As its consensus method (PoS). As a result, it has introduced a staking pool in which users can receive rewards and build their ETH holdings. By locking 32 ETH in the official PoS smart contract for a set length of time.
Since November 2020, the number of ETH placed in the Ethereum 2.0 staking contract has increased. From roughly 11,500 to 7.82 million ETH today. However, the shift has effectively removed 7.82 million ETH from circulation for the time being.
Cup and handle
A bullish backstop for Ether’s price is a combination of decreased supply and increased demand. Meanwhile, a cup and handle pattern on Ether’s longer-timeframe charts provides more evidence for an upside breakthrough.
As demonstrated in the chart below, the cup and handle is a bullish continuation pattern. With a rounding bottom and descending channel setup. The profit target for the structure is usually set at a length equal to the cup’s maximum height.