A ‘spooky’ Ethereum correlation suggests an imminent breakout
Ethereum has shown a strong correlation with small-cap stocks, particularly the Russell 2000 index, which is sensitive to interest rates. Analysts suggest that both assets could gain momentum in light of potential interest rate cuts from the Federal Reserve. Current market conditions indicate a 95.7% probability of a 0.25% rate cut at the Fed's upcoming meeting and an 82.2% chance of a further cut in December. Unlike Bitcoin, Ethereum generates yield, making it appealing in a rate-cut environment. Analysts also note a bullish cup-and-handle pattern in Ethereum and small-cap stocks, indicating a potential price breakout. With Ethereum stabilizing above $4,350, targets for the next price increase range from $5,200 to $8,500. As large capital moves into risk assets alongside easing monetary policies, Ethereum appears poised to reach new all-time highs soon.
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