Proactive Investors - This year’s rally in cryptocurrency assets is turning into one of the hottest stories in markets as trading continues into the second quarter, writes TickMill Group market analysts.
They noted that along with the breakout seen in Bitcoin, Ethereum (ETH) is now starting to gather strong upside momentum with ETH futures breaking above the 2025.5 level for the first time in a year, creating a “firmly bullish” outlook for the cryptocurrency.
The analysts believe the key driver behind the move has been the sharp shift in the outlook for US interest rates.
“While Fed rate projection had turned firmly hawkish back in January, just a few months forward the outlook has completely reversed with the market now pricing in rate cuts later in the year in line with growing recession risks,” the TickMill analysts said.
“Against this backdrop, a falling US dollar is creating plenty of support for crypto and should see further gains today and into next week if today’s retail sales data confirms a drop in spending,” they added.
Bullish momentum
The analysts concluded by saying the rally in ETH this year has seen its price surpass the 1695.5 resistance level while testing above the 2025.5 level this week for the first time since early last year.
They said the focus is on a further push higher towards the 2422 level next, in line with bullish momentum studies readings.