The Ethereum market is showing a confident recovery, once again reaching levels not seen since early June. Over the past week, the second-largest cryptocurrency by market cap has gained more than 11%, rising above the psychologically important level of $1900. This surge is not a coincidence, but the result of a confluence of fundamental and market factors.
The key catalyst was macroeconomic data. Yesterday's Consumer Price Index (CPI) report showed an annual increase of 3.5%, which was below the expected 3.8%. This is the strongest monthly slowdown in inflation since 2020. The market instantly revised its expectations regarding the Federal Reserve's next moves. The probability of a rate hike in July has virtually vanished, dropping to 8%.
Liquidation of Short Sellers and Return of Large Capital
The market reaction was immediate and aggressive. The volume of liquidated short positions on Ethereum reached an impressive $113 million. Open interest in futures soared to a monthly high, and large purchases are once again being recorded on spot exchanges. This indicates that bears were caught off guard, and bulls have seized the initiative.
Additional support came from several factors: progress in Japan with a crypto-ETF bill, a net inflow of $58 million into U.S. spot ETH-ETFs, and, most importantly, the long-awaited upward reversal of the ETH/BTC pair. This signal, in my view, is the main indicator of a trend change. Large institutional capital, which had long ignored ether in favor of bitcoin, is now starting to flow back.
Key Levels and Scenarios
All attention is now focused on the nearest resistance levels. The immediate target for buyers is $1950. A successful consolidation above this mark will open the path to the main milestone of $2000. A breakout of this level would be a powerful bullish signal and pave the way to $2200.
However, risks should not be overlooked. The RSI indicator is already signaling overbought conditions, so a short-term correction or consolidation would be quite logical. In the event of a pullback, the critical support zone is $1800. Losing this level would send ether back into a sideways range. A deeper scenario involves testing the defense line at $1740.
My analysis: The reversal of the ETH/BTC pair is the most significant signal we have seen in recent weeks. It indicates a shift in the preferences of "smart money." As long as Ethereum holds above $1800, the medium-term outlook remains positive, and the likelihood of testing $2000 in the near future is very high.