Ethereum price hits $1.6K as markets expect Fed to ease pressure

ETH price hits highest level since September, but data shows whales lack appetite for longs leverage effects.

A surprise $250 rally took place between October 25 and 26, pushing the price of Ether (ETH) from $1,345 to $1,595. The move prompted $570 million in liquidations in bearish Ether bets on derivatives exchanges, which was the biggest event in more than 12 months. Ether's price also broke above the $1,600 level, which was the highest price seen since September 15.

Let's see if this 27% increase in the last 10 days reflects any signs of a trend change.

Ether/USD 4-Hour Price Index . Source: TradingView

It should be noted that another 10.3% rally to $1,650 occurred three days later on October 29, and this triggered a another $270 million liquidation of short sellers in ETH futures. A total of $840 million in leveraged shorts were liquidated in three days, representing over 9% of total open interest on ETH futures.

On October 21, the market turned bullish after San Francisco Federal Reserve Chair Mary Daly announced her intention to slow the pace of interest rate hikes. However, the previous tightening move by the US central bank led the S&P 500 stock index to a contraction of 19% in 2022.

Despite the 5.5% rise in the stock market between October 20 and 31, ING analysts noted on October 28 that "we do indeed expect the Fed to open the door at a faster pace. slow through formal forward guidance, but it won't necessarily go that way." In addition, the ING report added: "We may get a final 50bps in February which would then mark the top. would leave a terminal rate of 4.75% to 5%."

Given the mixed signals from traditional markets, let's look at data on Ether derivatives to understand whether investors h...