Ethereum (ETH) might soon see a significant price boost as the U.S. Federal Reserve prepares to inject an estimated $800 billion in liquidity into the market.
This influx, tied to actions surrounding the U.S. debt ceiling and adjustments to the Treasury General Account (TGA), has sparked excitement among investors.
The timing of the $800 billion liquidity injection emerged as a focal point. Analysts observed that TGA balances often show consistent patterns, particularly around critical moments like debt ceiling debates.
The TGA, currently estimated at $850 billion, could drain down to around $700 billion by the end of Q4 2024. If U.S. lawmakers delay an agreement on the debt ceiling, the Treasury might need to draw down its reserves further through early 2025.
Historically, liquidity released from the TGA has positively impacted risk assets, including Ethereum, boosting their prices and increasing investor interest.
The substantial capital injection could benefit Ethereum, potentially driving its price higher in the coming months as the market anticipates increased liquidity.
ETH’s Divergence from Bitcoin
Currently, Ethereum has shown a notable divergence from Bitcoin, creating a unique position for ETH within the broader cryptocurrency market.
ETH/BTC experienced a marked separation in performance, a potential indicator of an upcoming shift in Ethereum’s favor.
If Ethereum maintains its divergence from Bitcoin, it could lead a new altcoin season, with ETH potentially steering the market toward higher valuations.
Observers noted ongoing manipulation phases, which often signal a change in trend.
Major assets, including U.S. stocks, gold, Bitcoin, and Ethereum, now approach previous highs. Within this setting, Ethereum appears fundamentally strong, ready for a potential rally.
Experts predict that ETH might establish a support base around the 0.032-0.034 BTC level, setting it up for a price surge heading into Q1 2025.
Despite nearing a red MACD monthly candle—a typically bearish indicator—analysts suggest that increased liquidity from the Fed could reverse this pattern, especially if Ethereum maintains key support levels and continues to diverge positively from Bitcoin.
Technical indicators also hint at a promising future for Ethereum. While ETH nearly closed its first red MACD monthly candle since the last bear market, analysts believe this would not hinder a price recovery.
Ethereum showed an “Inside Pivot” pattern, a technical setup that previously led Bitcoin to substantial gains.
Additionally, the TD Sequential, another technical indicator, flashed a buy signal on Ethereum’s 4-hour chart, suggesting a potential rebound if ETH holds above the $2,480 support level.
Could Ethereum Reclaim its ATH?
If the anticipated liquidity flows into the market, Ethereum might target a price above $6,000 in the coming months.
Investors who missed ETH at the $2,200 range could find fresh opportunities to enter the market. Bullish sentiments remain strong, with many market watchers seeing Ethereum’s fundamentals as a foundation for sustained growth.
While uncertainties around TGA estimates persist, Ethereum’s current market position and the expected liquidity injection create favorable conditions for a rally.
Should the Fed’s actions play out as anticipated, Ethereum would stand to gain significantly, potentially igniting a powerful upward trend in early 2025.
