Ether Hits Two-Month High Ahead of US CPI; Market Breadth Remains Weak

The second largest cryptocurrency has increased by almost 1% to $1,415, the highest since November. 8, taking the month-to-date gain to over 17%, CoinDesk data show. Per observers, Ethereum's impending Shanghai upgrade has been driving ether higher. Leader in the Bitcoin (BTC) market exceeded $18,000, reaching a maximum of four weeks.

While, future related to S.

"Adverse macroeconomic factors are turning into favourable macroeconomic factors – the US dollar has peaked and US inflation is falling rapidly. The market has moved on from the negative liquidity impact of the hawkish Federal Reserve and bankruptcy news flow of crypto exchanges and liquidity providers," Markus Thielen, head of strategy and research at crypto services provider Matrixport, said.

"This is why micro is now driving crypto again and why upgrading Shanghai is raising prices," Thielen added.

Ethereum's Shanghai upgrade, due in March, will de-risk staking by enabling withdrawals of the ether staked or locked into the Beacon chain since December 2020. The consensus is that the upgrade will stimulate the demand for staking, which will result in a reduction in the supply of ether in circulation and the markets seem to set prices in advance.

'This will motivate many eth holders to put their eth, because only 14% of the eth are in play at the moment, compared to 58% for the other protocols in layer 1. As a result, an additional $20 billion is readily available. The more stakes there are, the fewer opportunities there are to sell when negative news is on the market. Therefore, it's bullish," Thielen pointed out.

Noelle acheson, who wrote the popular "crypto is macro now" bulletin, said in the jan. 9 issue of the market update, 'the additional flexibility could attract more users to the network, potentially offering a positive net benefit."

At press time, more than 16 million ETH worth $22.8 billion was locked into Ethereum’s Beacon Chain staking contract, data from shows. The total has grown by 2.6% since the developers ethereum announced the upgrade of shanghai on dec. 8.

The way of least resistance for aether is on the upper side, the cryptocurrency break of a triangular consolidation model suggests.

However, the US CPI has the potential to slow the rise.

"For the time being, the ether market seems to be in balance at about $1,400. If the Consumer Price Index in the United States is lower than forecast, Chances are pretty good, it will continue to be close to $1,600.", Cryptographic asset management company blofin trading volatility, told coindesk. 'But if it beats the estimates, there is a chance of withdrawal."

There is consensus that the Department of Labour should show that the annual rate of earnings of the overall CPI fell from 7.1 per cent in November to 6.6 per cent in December. The base figure, which excludes the volatile component of food and energy, should have fallen from 6.0% to 5.7%.

The scale of the market continues to be small.

The total market capitalization of all cryptocurrencies has grown from 12% to close to 500 billion dollars this month. The upturn, however, was led by a few pieces, including the EPF.

It is the message of the market size indicator, which measures the number of key cryptocurrencies trading above the 200-day rolling average (SMA).

The breadth indicator is widely used in traditional markets to assess the degree of participation in a rally and broader market momentum. The market is called bull when the width is greater than 50%. The principal coins are those that have a market value of $1 billion or more. (small parts are subject to manipulation and are therefore not included in the study).

At the time of the press, there were 40 crypto-currencies with a market capitalization of at least 1 billion dollars.

Of those, 13 – ETH, APE, ATOM, BNB, DOGE, LDO, LTC, MATIC, OKB, QNT, TON, XMR, and XRP - negotiated over ADM of 200 days, and everything else, including the leading bitcoin marketplace, continued to fall below the key average, as per TradingView data.

In other words, most of the major coins were trading below the key average, suggesting a low level of participation in the recent upturn.