For Ether to become medium-term bullish it not only needs to hold above its 24 February low at $1803.64 but also rise and close on a daily basis above its 8 February high and February 2025 low at $2149.30 – $2152.44. Such an advance may put the $2,00 region back on the cards.
Macro backdrop improves for risk assets
Macro sentiment has also turned more constructive. Renewed expectations that US Federal Reserve (Fed) monetary policy could ease in July has improved risk appetite across asset classes, provoking a strong rally in recently downbeat software and technology sectors ahead of Wednesday’s after-hours NVIDIA earnings.
While cryptocurrencies remain sensitive to liquidity conditions, the absence of fresh macro shocks this week has allowed investors to re-engage with digital assets.
Bitcoin, often treated as a high-liquidity proxy for crypto exposure, attracted initial inflows, with Ether subsequently outperforming as confidence broadened.
On-chain data supports rally credibility
On-chain indicators have supported the rally’s credibility. Exchange balances for both Bitcoin and Ether have not surged, suggesting that the move higher has not been accompanied by heavy distribution from long-term holders.
In Ether’s case, elevated staking participation continues to limit liquid supply, tightening available inventory during periods of renewed demand. This supply dynamic has helped prices respond more quickly to incremental buying pressure.
Narrative momentum strengthens
Narrative momentum has further strengthened sentiment. For Bitcoin, ongoing institutional adoption themes – including treasury allocations and product integration by asset managers – have provided a structural backdrop that makes rallies easier to sustain when flows return.
For Ether, continued progress around layer-2 adoption, tokenisation initiatives and decentralised finance integrations has reinforced its positioning as the foundational infrastructure layer for on-chain activity.
Bitcoin-Ether correlation patterns
The correlation between Bitcoin and Ether during the rally has been notable. Historically, Bitcoin often leads directional moves, with Ether following and at times outperforming once confidence spreads.
This pattern appears to have re-emerged, with ETH benefiting from improved risk appetite and higher beta characteristics once Bitcoin confirmed strength by rising to its major February resistance area.