Ethereum prices rose on Tuesday in response to the release of positive CPI data, causing the rest of the crypto market to follow suit. After ETH hovered around $1200 over the weekend, the price finally broke through the $1,300 barrier. However, the digital asset has been facing stiff resistance at $1,350, which may be a bearish sign for the cryptocurrency.
Crypto Traders Cautious
At this point, Ethereum still appears to be of concern to traders. Even Tuesday’s rally has done little to reassure buyers, particularly with the Federal Reserve’s announcement due to take place on Wednesday. Inflation rates remain high, standing at 7.1%, even though it has slowed.
Due to this, traders are taking a more cautious stance and not placing too much emphasis on ETH for the time being. This trend is projected to continue throughout the mid-week session until Powell’s announcement is made.
Depending on the position, there are also expectations that the Federal Reserve will take a more relaxed approach. Over the last few months, the country’s inflation had pushed the Fed to be more aggressive. However, the dip in inflation this time is evident, and the Fed should be less stringent. Otherwise, a continued hawkish stance by the Fed could result in a crypto market pullback, with Ethereum potentially losing Tuesday’s gains.
Binance FUD Impact on ETH
Recently, Binance has been the subject of criticism from crypto users as questions were raised about the exchange’s reserves. Ultimately, large withdrawals were made from the platform. The majority of Ethereum withdrawals from centralized exchanges during the week were due to these withdrawals.
Rumors have been circulating that the exchange may be insolvent. Some have even started to prepare for another FTX event in the eventuality. Naturally, investors are now more cautious of the possibility of a downturn due to this.
Alternatively, the withdrawals from centralized exchanges may also be a sign of ETH holders accumulating. Reduced trading volume on central exchanges could be a sign of a digital asset bottom. Following the Fed’s announcement, which turned out to be positive, ETH is projected to reach $1,400 before the close of the day.
