Ether (ETH) is showing a confident recovery, returning to the highs of early June. Over the past seven days, the asset has gained 11%, once again surpassing the psychologically important mark of $1900. At the time of writing this analysis, the price has corrected to $1885, but the overall momentum remains bullish.
Fundamental Catalyst: Macroeconomic Shift
The key driver of growth was unexpectedly "cool" US inflation data. The Consumer Price Index (CPI) for May came in at 3.5% against the expected 3.8% — the strongest monthly decline since 2020. The market instantly revised its expectations for the Fed rate: the probability of a hike in July dropped to 8%, virtually eliminating "hawkish" risks.
This macroeconomic reassessment triggered a massive liquidation of short positions in ETH. The volume of closed shorts exceeded $113 million, and open interest (OI) soared to a monthly high. A notable influx of buyers is also being recorded on the spot market, with major players actively increasing long positions.
Change of Leader: ETH vs BTC
Particular attention should be paid to the reversal in the ETH/BTC pair. After a prolonged period of underperformance, Ethereum is finally outpacing Bitcoin in terms of growth rate. This signals that large institutional capital is beginning to flow from BTC into ETH. Concurrently, we are seeing an inflow of $58 million into ETH-ETFs, as well as progress on the Japanese crypto-ETF bill — additional fuel for the bullish scenario.
Key Levels and Scenarios
To continue the upward movement, buyers need to consolidate above $1950. The main threshold is $2000; breaking through it would open the path to $2200. However, a correction should not be ruled out: the RSI indicator is overheated, and a short-term cooldown would be logical. In case of losing support at $1800, ETH risks returning to a sideways trend, with the critical line of defense being the $1740 level.
More conservative market participants, particularly a trader under the pseudonym KingofNPCs, believe that a full-fledged bull market can only be discussed upon consolidation above $2100. In his opinion, the catalyst for movement in either direction will be the decision on the Clarity Act.
My view: The reversal of the ETH/BTC pair upward is one of the strongest technical signals of recent months. If the macroeconomic backdrop continues to soften, Ethereum has every chance of becoming the market locomotive in the second half of the year. However, the current overbought condition requires caution: I expect a pullback to $1850–1880 for a reset before the next surge.