Ethereum Rises Above $2,700 After Fed Chair’s Presentation, Stocks See 284,000 ETH Exodus

• Ethereum rose more than 5% after the Fed Chair confirmed that the central bank is looking to cut rates.
• Net ETH exchange flows hit a two-month low after buyers moved more than 283.9k ETH out of exchanges.
• Ethereum ETFs extend outflows for six straight days after Grayscale’s ETHE offset positive flows from Fidelity’s FETH.
• The top altcoin has the potential for a 30% rally if bulls can exert strong buying pressure to break through a key rectangle resistance.

Ethereum rose 5% on Friday as bulls initiated strong buying pressure following indications by US Federal Reserve (Fed) Chairman Jerome Powell that an interest rate cut is imminent.

Daily Market Reasons: Rate Cuts, Ethereum Exits, ETF Series

Fed Chairman Powell noted that an interest rate cut is on the horizon in his Friday morning speech in Jackson Hole, Wyoming. “The time has come for politics to adjust,” Powell said. “The direction of travel is clear, and the timing and pace of rate cuts will depend on the data received, the evolution of the outlook and the balance of risks.”

Following his speech, Ethereum jumped alongside the crypto market by more than 2% as investors appeared to regain confidence in the top altcoin. Risk assets such as cryptocurrencies tend to perform better in lower interest rate environments due to a lower cost of capital.

The buying pressure from investors is visible in the net exchange flow of Ethereum, moving to 283.9K ETH in outflows – the lowest level since June 11.

ETH Exchange Netflow

Net exchange flow is the difference between currencies flowing into/out of exchanges. Net outflows signify dominant buying pressure, while the opposite is true for net inflows.

The seven-day ETH net exchange flow moving average also fell to 38,983 ETH in outflows.

Meanwhile, Ethereum ETFs look poised to end the week with net outflows after extending their losing streak to six days on Thursday, according to data from Farside Investors. The nine US spot ETH ETFs saw a combined net outflow of $800,000 – the lowest daily outflow since launch.

In particular, Fidelity’s FETH saw net inflows of $14.3 million, while VanEck’s ETHV and Grayscale’s mini ETH saw inflows of $1 million and $3.7 million, respectively. However, their positive inflows were offset by outflows of $19.8 million in Grayscale’s ETHE.

The drop in outflows, combined with positive broader market sentiment, could help ETH ETFs post their first net inflows on Friday.

ETH Technical Analysis: Ethereum Could Rise 30% If It Breaks Key Rectangle Resistance

Ethereum is trading around $2,720 on Friday, up more than 5% on the day. Over the past 24 hours, ETH has seen liquidations of over $26.97 million, with long and short liquidations accounting for $12.84 and $14.13 million, respectively.

ETH has been trading in a key rectangle since the August 5 market crash. The price of $2,817, which served as a key support level for five months from March to July, was a key resistance after ETH breached it on August 4.

ETH/USDT Daily Chart

A key trend extending from May 27 to September 25 also kept the ETH price at bay.

However, with the Fed chairman confirming that a rate cut is imminent, ETH could break through the $2,817 resistance and stage a 30% rally towards $3,542. A breakout above $3,542 could see ETH attempt a move towards its yearly resistance at $4,093.

ETH is facing resistance from the rising 100-day and 200-day simple moving averages (SMA).

The Relative Strength Index (RSI) moving average rose after making a lower low on August 15. A cross above the median line could give strength to a bullish move.

The Awesome Oscillator (AO) has been posting consistent lower green bars below zero since hitting a low on August 10, indicating bearish momentum is fading.