Although broader risk assets rallied after the latest CPI release, Ethereum emerged as one of the clearest beneficiaries, climbing toward $4,400 as traders interpreted a 2.7% year‑over‑year inflation print and a cooling PPI at 1.8% as reducing near‑term pressure on monetary policy. The softer inflation readings fed expectations of a Federal Reserve pivot toward easier policy, with markets pricing in cuts by end‑2025 and some participants anticipating earlier easing, and that shift supported flows into risk assets, including equities and crypto. Treasury yields declined in the immediate wake of the data, removing a headwind for growth exposures and helping to explain the initial crypto rallies that placed Ethereum near the front of the move. Caution remains warranted, however, as volatility and divergent performances across assets signaled mixed conviction among investors.
Ethereum’s on‑chain and institutional fundamentals reinforced the market response, with nearly 30% of ETH supply staked and institutional accumulation exceeding $2 billion recently, both factors that reduce circulating liquidity and increase buy‑side pressure. The token traded within an ascending channel around $4,400, where technical indicators suggested a potential breakout above $4,500 resistance could pave the way to $5,000 targets, though such scenarios depended on sustained daily closes and continued macro support. Incorporating moving averages in the analysis helps confirm the trend strength needed for such breakouts. DeFi expansion on Ethereum continued to underpin demand for gas and network utility, aligning fundamental network growth with price dynamics, while market charts showed ETH attempting to catch up to equities and Bitcoin in the post‑CPI risk‑on move.
Attention to related Layer‑1 ecosystems, particularly AVAX, offered additional context for altcoin prospects, as rising staking participation and active addresses on Avalanche mirrored the supply dynamics seen on Ethereum and could presage broader altcoin strength. Observers noted that positive CPI readings historically presaged wide crypto rallies, with liquidity from expected Fed easing tending to flow into altcoins after Bitcoin led initial gains, but traders remained attentive to Fed communications and rate‑market repricing that could reverse sentiment. Overall, the intersection of macro relief, constrained ETH supply, and on‑chain growth created a constructive yet conditional backdrop, where technical confirmations and policy clarity would determine whether recent momentum sustains. Markets also reacted with equities rallying and Treasury yields falling, increasing the likelihood of rate cuts. Additionally, significant ETF inflows and institutional demand have supported higher crypto valuations, reflecting institutional interest.
