ETH ‘god candle’ emerges amid Fed rate cut hopes: Is $6K Ether next?

Key takeaways:

• ETH surged 13% on Friday after Federal Reserve Chair Jerome Powell’s dovish Jackson Hole speech hinted at an interest rate cut in September.

• Onchain and technical indicators signal Ether’s potential to hit $6,000 in the short term.

Ether’s price displayed strength at the Wall Street open on Friday, rising 13% to $4,788 following Federal Reserve Chair Jerome Powell’s Jackson Hole speech.

ETH price rallied from $4,200 within minutes, reclaiming $4,600, a level that has suppressed the price over the last seven days, per data from Cointelegraph Markets Pro and TradingView.

This performance follows Powell’s Jackson Hole speech, where he hinted at a potential interest rate cut in September, signaling a dovish stance that boosted market optimism. 

Interest rate cut odds for the Sept. 17 FOMC meeting have now jumped to 91.5% from 75% a day prior, according to the CME Group Fedwatch tool.

This adds to the encouraging bullish sentiment that could potentially drive ETH to new highs.

ETH crosses $4,600 with a “god candle,” said analyst Elisa in response to Ether’s reaction, adding:

Several bullish signs suggest that ETH is well-positioned to break out toward fresh all-time highs in the following days or weeks.

Continued spot ETF inflows back ETH price upside

One factor supporting Ether’s bull argument is persistent institutional demand, reflected by significant inflows into spot Ethereum exchange-traded funds (ETFs).

Spot Ether ETFs saw $287.6 million in inflows on Aug. 21, breaking a four-day outflow streak. These investment products have seen net inflows totaling $2.55 billion month-to-date as per data from Farside Investors.

As Cointelegraph reported, Ether continued dominating global exchange-traded products (ETPs) last week, with inflows totaling $2.9 billion, marking growing investor appetite for the altcoin ETPs.

Exchange supply plummets

ETH balances on exchanges have dropped to nine-year lows, falling to 14.9 million ETH for the first time since July 2016, Glassnode data shows.

The total balance between inflows and outflows in and out of all known exchange wallets shows a steep decline since October 2023, when withdrawals from the trading platforms began to surge. This drop accompanies a 180% rise in Ether’s price over the same time period.

Reducing Ether supply on exchanges may signal an incoming price rally fueled by a “supply shortage,” which occurs when strong buyer demand meets decreasing available ETH, according to crypto investor Crypto Virtuos.

“The amount of $ETH held on centralized exchanges has dropped to its lowest level in 9 years,” Crypto Virtuos said in a Monday post on X. 

This implies that more people are choosing to hold and stake ETH long-term, resulting in less ETH available for selling. 

“Chance of a supply shortage coming. Is ETH ready for its next big move?”

Bull flag breakout places ETH price target above $6,000 

From a technical perspective, Ether's price action has validated a bull flag pattern on the daily chart.

The bull flag resolved when the price broke above the upper trendline at $4,300. ETH could then rise by as much as the previous uptrend’s height. This puts the upper target for the altcoin at $6,150 — up 43% from the current price.

Additionally, the daily relative strength index is positive at 66. This suggests that the market conditions still favor the upside, boosting Ether’s chances of reaching its bull flag target.

Popular trader Merlijn The Trader had a more ambitious target for Ether, saying that breaking out of a four-year downtrend coupled with a bullish cross from the MACD on the monthly chart sets ETH up for a rally toward $10,000.

THE $ETH BREAKOUT EVERYONE WAITED FOR.

Ethereum just shattered a 4-year downtrend.

Monthly MACD golden cross → confirmed.

This isn’t noise.

This is liftoff.

Next stop: $10,000 Ethereum pic.twitter.com/Mm83ZMvCAh

Other analysts also predict that Ether could reach $10,000 and beyond in 2025, citing institutional demand through spot Ethereum ETFs and ETH treasury companies remains notably strong, suggesting bullish market sentiment.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.