Ethereum Investors Stake $110M in 3-Days amid Dovish China Inflation Report

Ethereum Price Analysis:

Ethereum price finally breached the $2,500 resistance on Monday Oct 10, reflecting a 10-day growth performance of 10.43% overtaking Bitcoin’s 8% gains within the same timeframe.

On-chain data shows how an unusual increase in ETH 2,0 staking, amid bullish tailwinds for China’s latest inflation report, both contributed to Ethereum’s accelerated upswings. Can ETH price advance towards $2,600 in the week ahead?

Why is the Crypto Market Going Up Today?

China Inflation Report Stimulates Crypto Market Demand

The global crypto market has started the week on the strong foot with Ethereum price breaching the $2,500 level in the early hours of Oct 14. The rally marks the first time that ETH has traded above $2,500 since Oct 1. Market reports suggests official economic indices reports released by China’s Ministry of Finance (MoF) may have contributed to the crypto market rally on Monday.

On Oct 13, the latest China economic report revealed weakening consumer demand, amid shrinking inflation. According to the report China’s Producer-related prices dropped by another 2.8% year-on-year to hit 0.6 percentage points in September 2024 after a 1.8% in August.

As the economy activity weakens, Chinese investors began rotating funds towards alternative markets including cryptocurrency, in anticipation of dovish measures from Beijing authorities. This partly explains why the global crypto markets surged in the early hours (GMT) on Monday, October 14.

Ethereum Price Gains Skips Ahead of BTC

Evidently, the latest China inflation report has help Ethereum price breach the elusive $2,500. If US-based crypto ETFs also respond with another wave of buying pressure when US markets open, Ethereum price rally will likely advance further in the week ahead.

However, zooming into the market trends, Ethereum has attracted significantly higher demand relative to BTC in the first-half of October.

The chart above shows that ETH price tumbled as low as $2,402 on Oct 2, as flaring geopolitcal crisis in the Middle-east shook up the global financial markets. But ETH price has now surged to $2,546 on Oct 14, reflecting, a 10.43% growth performance over the last 10-days.

Meanwhile in comparison, Bitcoin price only mustered 7.69% gains as it topped out at $64,472 on Monday morning.

This evidently shows that ETH has consistently outperformed BTC since the crypto market recovery began in on Oct 3, propelled by strengthening US labor market report which saw unemployment figured drop to 6-month lows.

Ethereum Investors Staked 43,840 ETH in 3-days as ETF Inflows Swell

As China inflation data has evidently spurred increase demand across the crypto markets. However, on-chain data shows that rising staking deposits exerted additional bullish pressure on ETH price action.

The staking trends chart below monitors  changes in the total number of ETH coins deposited on the beacon chain, provide real-time insights into investor sentiment.

Looking at the chart above, ETH 2.0 staking deposits had initially declined to 33,300,500  ETH on Friday, Oct 11. That figure has increased significantly over the weekend reach 33,341,364 at the time of writing on Oct 14. This reflects that investors deposited 43,840 ETH worth approximately $110 million within the last 3-days.

When staking inflows increase during a price uptrend, strategic investors interpret it as a major bullish momentum signal for 2 key reasons. First it signals that majority of Ethereum’s main stakeholders are unwilling to book early profits at the current price levels.

More so, increases staking deposits temporarily reduces ETH supply available to be traded on exchanges. This decline in short-term supply during a period of rising market demand increases the likelihood of rapid price upswings.

Evidently, the $110 million staking deposits, amid the demand surge sparked by China inflation report have contributed to ETH 10.43% price gains surpassing Bitcoin’s performance.

If the current market dynamics persists, ETH price could be on the verge of another leg-up towards $2,600 before the close of October 2024.

ETH Price Forecast: Technical Signals Hint at $2,600 Breakout

Ethereum price is currently showing bullish momentum after breaking the key resistance level at $2,500. As shown in the ETH/USD daily chart, Ethereum price hit a high of $2,542 on October 14, following a series of ascending price movements and rising demand across the crypto markets.

The Fibonacci arc overlay on the chart indicates strong support at the 61.8% and 100% levels, suggesting potential for further upside in the short term. Ethereum is currently holding above the middle Bollinger Band, which indicates an upward trend is continuing. This is further supported by the narrowing of the Bollinger bands, signifying reduced volatility and the likelihood of an imminent breakout.

In terms of short-term price action, an ETH breakout above the 1.618 Fibonacci extension level around $2,600 would confirm the bullish scenario, with the next target likely set near the 2.618 level at $2,800.

The Relative Strength Index (RSI) is currently at 54.81, slightly above the neutral level of 50. This reflects a positive sentiment, with room for further upward movement before entering overbought territory. The RSI’s positioning also signals that Ethereum has gained stronger demand compared to Bitcoin in recent days, reinforcing bullish pressure.

On the downside, losing the $2,400 support this week, could effectively negate the bullish outlook. However, with Ethereum outperforming Bitcoin, further upward momentum will likely push ETH towards $2,600 in the near term, provided no significant downside catalysts emerge.