- Ethereum price went parabolic this week.
- This rally happened as the fear and greed index rose amid Fed pivot hopes.
Ethereum price surged to the highest level since September 15th of this year. ETH has risen by almost 30% from its lowest level this month, giving it a market cap of more than $187 billion. Other similar coins like Ethereum Classic and EthereumPoW have jumped.
Fear and greed index rises
Ethereum price has been in a strong bullish trend in the past few days as fear in the market eased. According to CNN Money, the fear and greed index rose from last week’s low of 34 to today’s 54. This means that it is heading towards the fear level.
The index rose as the safe haven demand rose to an extreme greed level. Put and call options moved to the greed level while the market momentum and stock price breadth moved to the fear level.
The fear and greed index has risen as signs of a Fed pivot emerge. Data published on Tuesday showed that consumer confidence dropped from 107 to 102 as inflation remained at an elevated level. Other data showed that the house price index continued its bearish trend.
Find out how to buy Ethereum in 2022.
Therefore, there is a likelihood that the Federal Reserve will start to pivot soon. Most analysts expect that the Fed will hike rates by 75 basis points in November and then shift its tone. Historically, Ethereum and other cryptocurrencies tend to do well in a period of easy money policy.
Ethereum price has also risen because of the performance of the US dollar index and VIX. The US dollar index has slipped from the year-to-date high of $115 to about $110 because of hopes of a Fed pivot. Similarly, the VIX index has moved from this month’s high of 35 to a low of 29.
The next major catalyst for ETH price will be the upcoming Shanghai Upgrade. Its Shadong testnet has already been launched.
Ethereum price forecast
The four-hour chart shows that the ETH price has been in a strong bullish trend in the past few days. It has managed to move below the important support level at $1,215 to a high of $1,550. As it rose, the coin rose above the descending channel shown in blue.
It has also risen above all moving averages while the Relative Strength Index (RSI) has moved to the overbought level. Therefore, while the overall trend is bullish, there is a likelihood that the coin will pull back as some buyers take profits.
