Ethereum’s blockchain asset, ETH (ETH), broke a new record on November 8, driven by a rally among the top cryptocurrencies ahead of the release of this week’s major US inflation report.
The value of ETH surged 3.30% in the past 24 hours to reach $4,770 for the first time in history when Bitcoin (BTC) returned $66,000, indicating a strong positive correlation between the two digital assets.
Cryptocurrency correlation table (based on data collected in the last 24 hours). Source: Crypto Watch
Return of inflationary pressures
Wall Street economists expected the US CPI to rise to 5.8% in October ahead of Wednesday’s Bureau of Labor Statistics report on inflation. This is an increase from the 5.4% recorded in September, the highest since 1990.
In addition, the consensus forecast from Bloomberg is that US consumer prices rose 0.6% between September and October, up from 0.4% between August and September.
General inflation in the United States. Source: Bloomberg, Bureau of Labor Statistics.
The latest inflation data was released following last week’s Federal Reserve meeting. The US Federal Reserve decided to scale back the $120 billion per month purchasing program to tame ever-increasing consumer prices and lower it to the planned target of 2%.
But Fed officials maintained their long-term view that inflation was “temporary” and ultimately chose to keep core rates close to zero. This has kept bitcoin’s overall bullish momentum alive, given its high yields in a period of ultra-low interest rates and massive bond purchases.
ETH price technical information
Ether technical specifications supported the upside, with price trending against the resistance trendline of the prevailing ascending channel – around the $4800-5000 range – as shown in the chart below.
ETH/USD daily price chart with a bullish channel setup. Source: TradingView
In addition, the spread of the ongoing bull flag has also pushed Ether’s profit target to around $4,800.
Bernard Rzemelka, CEO of Global Markets at Goldman Sachs, expects Ether to reach $8,000 by December 2021 if the token meets inflation expectations.