Ethereum Primed for Positive Q3 Following Slow Inflation and Launch of ETH ETF

Ethereum is up 0.5% on Thursday following cooling inflation reports in the US. However, mixed on-chain sentiment signals uncertainty among investors despite the potential launch of spot ETH ETFs.

Ethereum price showed signs of recovery on Thursday after a positive report on US inflation and the possibility of the launch of a spot Ethereum exchange-traded fund (ETF).

After the data was released, ether rose by 0.5% to reach $1,700. But the world’s second-largest cryptocurrency later dropped back to around $1,680. Despite the slight decrease, ether has managed to hold above the key support level of $1,650.

The Consumer Price Index (CPI) for August rose by 0.1% on a monthly basis, which was less than the 0.4% increase that had been anticipated by economists. The annual rate of inflation in the United States also decreased to 8.3%, which was lower than the projection of 8.4%.

This news provided some relief to investors, who had been concerned that the Federal Reserve would continue to raise interest rates aggressively in an effort to combat inflation. Higher interest rates typically lead to a decrease in the demand for riskier assets, such as cryptocurrencies.

In other news, the cryptocurrency community is eagerly awaiting the launch of a spot ETF for ether, which would allow investors to gain exposure to the second-largest cryptocurrency by market capitalization without having to directly purchase the asset. Several applications for ether ETFs have already been submitted to the Securities and Exchange Commission (SEC), and a decision on whether or not to approve them is anticipated in the upcoming months.

The launch of a spot ether ETF would be a significant milestone for the cryptocurrency industry, as it would provide a new and simple method for investors to include ether in their portfolios. This could lead to an increase in demand for ether and contribute to the overall growth of the cryptocurrency market.

However, the on-chain sentiment for ether is showing signs of mixed feelings among investors, with the Fear and Greed Index indicating "Extreme Fear" at the time of writing. This suggests that investors are still hesitant despite the recent recovery in ether's price.

The on-chain metrics are also indicating a period of consolidation, with the ether price holding within a narrow range and the Bollinger Bands remaining relatively tight. The lack of strong directional movement is also being highlighted by the flattening Moving Averages Convergence Divergence (MACD) line.

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