Ether price gains followed Donald Trump’s major crypto endorsement at the Bitcoin 2024 conference in Nashville, among other factors.
Ethereum’s native token, Ether (ETH), started the new week strong, reflecting a positive market sentiment after Donald Trump’s significant endorsement of cryptocurrencies at the Bitcoin 2024 conference in Nashville and ahead of the Federal Reserve meeting.
Trump’s Pro-Crypto Speech Drives ETH Price Higher
Ether’s price rose by 3.5% to approach $3,400 on July 29, just two days after Trump’s speech to the Bitcoin community in the United States.
Trump proposed the establishment of a national strategic Bitcoin (BTC) reserve, where the U.S. government would keep 100% of the BTC it currently holds or acquires in the future. Following his speech, Republican Senator Cynthia Lummis of Wyoming announced a bill for the U.S. Treasury to acquire 1 million BTC over five years.
Trump’s pro-crypto policies and the potential for a more favorable regulatory environment in the U.S. have boosted the prospects for broader crypto adoption. Following his speech, Hong Kong Legislative Council Member Johnny Ng announced plans to explore incorporating Bitcoin into the region’s financial reserves.
These optimistic developments lifted Bitcoin and the rest of the crypto market on July 27. Positive news for major cryptocurrencies like Bitcoin often boosts the entire market, including Ether.
Ethereum Rises on Hopes for Interest Rate Cuts
Ether’s price increase today comes ahead of the Federal Reserve’s policy announcement and Chair Jerome Powell’s remarks on July 31. Investors are looking for signs supporting a potential interest rate cut in September.
With the Fed’s benchmark rate currently at 5.25% to 5.5%, policymakers have recently highlighted a balanced labor market and declining inflation, suggesting a case for lower borrowing costs. Several experts, including former New York Fed President William Dudley and economist Mohamed El-Erian, argue for more aggressive rate cuts, warning of potential issues if rates remain too high.
The likelihood of a September rate cut has improved to 87.7% from 57.9% a month ago.
In turn, yields on short-dated and long-dated U.S. Treasury notes have declined in recent weeks, making investing in non-yielding, “riskier” assets like Bitcoin and Ether more attractive.
ETH Funding Rates Reach June Highs
Today’s Ether price gains coincide with Ethereum futures’ funding rates rising to levels last seen in June.
As of July 29, the Ether funding rates reached 0.26% per week, up from its month-to-date low of 0.014% per week. Meanwhile, the open interest has declined to $13.97 billion on July 29, down from the monthly peak of $15.22 billion.
A falling open interest and rising funding rate generally suggest short covering, meaning bearish positions are being closed. This indicates that traders’ bullish sentiment is increasing, as evidenced by long traders paying short traders to keep their positions open, leading to higher funding rates.
This combination often precedes a bullish price movement.
ETH price is now approaching the channel’s upper trendline at around $3,460, coinciding with the 0.5 Fib retracement line. A decisive breakout above the channel could boost the price toward the next Fib line at around $3,600.
Summary Review: Ether’s recent price increase is driven by a combination of Trump’s pro-crypto stance, improving prospects for interest rate cuts, and positive market sentiment.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
