Ethereum (ETH) Hints 50% Price Boom As US Election Nears — 3 Reasons

Ethereum’s native token, Ether (ETH), has emerged as one of the best-performing cryptocurrencies in the last 24 hours, rising by over 5.50% to around $2,630. Its gains accompany similar upside moves elsewhere in the market, with Bitcoin (BTC) crossing $70,000 to retest its June 2024 highs.

The top catalysts driving these gains so far include the rising odds of a Donald Trump win in the upcoming United States presidential election and the improvement in the odds of an interest rate cut at the next Federal Open Market Committee (FOMC) meeting.

Simultaneously, Ether’s potential to continue rallying into the election and interest rate season looks huge due to supportive technicals.

Ethereum and Its Connection to a Potential Trump Win

Ethereum’s price gains follow Donald Trump’s rally at Madison Square Garden in New York on Oct. 27, where Tesla and SpaceX CEO Elon Musk promised a $2 trillion tax cut for Americans if Trump were re-elected.

The odds of a Trump win improved after the rally, with Polymarket data showing that 65.8% of the betters favored the outcome. Trump is pro-crypto and has promised to make the US the world’s crypto capital if reelected to the White House.

Democratic nominee Kamala Harris had 34.2% odds of a win against Trump and other candidates — a boost for the US crypto community, given her vague stance toward crypto regulations and an outright obstructive campaign against the sector by other Democrats during the Joe Biden presidency.

ETH’s price has risen 6% since the Trump rally.

Another Rate Cut is Very Likely

The US election on Nov. 5 will follow the Federal Reserve’s interest rate decision on Nov. 7. On Oct. 29, the target rate probability for a 25 basis point (bps) rate cut was 96.60%, compared to 46.70% a month ago.

Lower rates reduce the opportunity cost of holding US Treasury bonds, given their yields drop accordingly. That influences investors to seek returns in riskier assets like stocks and cryptocurrencies like Bitcoin and Ethereum.

Ethereum Technical Analysis Presents Strong Case for 50% Price Boom

Ether’s price can rally toward $4,000 during the election season and following the Fed’s rate season.

The bullish outlook for ETH is underscored by its ongoing ascending triangle pattern. Recently, ETH has been consolidating near the triangle’s rising support trendline (highlighted in the red rectangle), a setup that historically precedes strong rebounds toward the upper resistance line around $4,000.

The chart’s weekly Relative Strength Index (RSI) currently sits around 47, just seventeen points above the oversold threshold of 30. This indicates that ETH has room for further gains before reaching overbought territory, supporting the potential for a rally akin to its rebound in Q4 2023.