Ethereum back in price discovery as ETH approaches $5K
Ethereum blockchain's native asset Ether (ETH) touched a new record high on Nov. 8, supported by a rally across the top cryptocurrencies ahead of a key U.S. inflation report this week.
ETH price rose by 3.30% in the past 24 hours to $4,770 for the first time in history as Bitcoin (BTC) reclaimed $66,000, demonstrating the strong positive correlation between the two digital assets.
Inflationary pressure returns
Wall Street economists anticipated the U.S. consumer price index (CPI) to rise to 5.8% in October ahead of the Bureau of Labor Statistics' inflation report on Wednesday. That would log a step up from the 5.4% tempo recorded in September, the highest since 1990.
Additionally, consensus forecasts observed by Bloomberg suggested that the U.S. consumer prices rose 0.6% between September and October, up from 0.4% between August and September.
The latest inflation figures came after the Federal Reserve's policy meeting last week. The U.S. central bank decided to unwind its $120 billion a month asset purchase program to tame the persistently rising consumer prices and bring them down to its intended 2% target.
But the Fed officials stuck to their long-term view that inflation is "transitory" in nature, eventually deciding to keep their benchmark interest rates near zero. That kept Bitcoin's overall bullish momentum intact, given its high returns in the period of ultra-low interest rates and massive bond-buying.
ETH price technicals
Ether's technicals supported an upside outlook, with the price trending eying a run-up toward its prevailing ascending channel's resistance trendline — near the $4,800-$5,000 area — as shown in the chart below.
Additionally, the ongoing Bull Flag breakout setup also shifted Ether's profit target to near $4,800.
Bernhard Rzymelka, global markets managing director at Goldman Sachs, anticipates Ether to hit $8,000 by December 2021 if the token keeps tracking inflation expectations.
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