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Gearing Up For $8,000
Market analysts at Goldman Sachs have said Ethereum’s price movements in line with inflation if continued, may place the asset in position for another upward rally. Goldman Sachs Global Markets Managing Director Bernhard Rzymelka circulated a note that outlined the correlation of ETH’s price movements with inflation breakevens for the past two years. Inflation has been one of the driving forces behind the adoption of crypto in recent times. As countries shut down due to the pandemic in 2020, inflation rates around the globe shot up as nations could no longer carry out trade with one another. This has persisted into 2021 with inflation rates for the United States at 4.2%. As such, investors have had to find better ways than traditional investment options to hedge against growing inflation and digital currencies as Ethereum has presented as an option.ETH price drops from ATH | Source:Goldman Sachs market analysts put forward that if ETH continues to follow the same line, then the digital asset will rally 80% towards $8,000. However, the analysts explained that this could go either way. Investors’ views of current inflation pressures may persist and if they do, it could be “a sign of exhaustion and peaking, or a starting point of an accelerating rally upon a break higher,” the note said.
Ethereum Trending Higher
Ethereum had trended downwards after losing its footing above $4,400. Bulls had hoped to settle the digital asset above the $4,500 but market momentum dropping during the weekend has seen ETH register lower than expected in the early hours of Monday. This had however not deterred the bulls as the asset is poised to begin another rally to once again test the $4,400 price point.Related Reading | New Ethereum-to-Cardano Bridge Will Provide NFT Creators Eco-friendly Options
The recently completely had brought more interest into the asset. With this upgrade, ETH is one step closer to becoming a deflationary asset, a turnaround expected to trigger a surge in the price of the asset once the coins become more scarce. Although indicators point to more bullish movement, a fall below the $4,300 resistance point will drag the asset farther down. This could see the asset touch back down towards $4,000 again. However, major resistance to this downside will come at $4,150.Featured image from Coingape, chart from TradingView.com