Crypto market participants have become more optimistic about the near future after the US Consumer Price Index (CPI) figures showed inflation rates declining to 2.8%. The latest CPI data has generated positive expectations about Federal Reserve policy changes because it could potentially boost risk asset demand including cryptocurrency markets. Investors are focused on monitoring Ethereum (ETH) and XRP along with Dogecoin (DOGE) because Bitcoin has overcome the $83,000 threshold but the market’s reaction remains under analysis.
US Inflation Declines, Boosting Crypto Market Confidence
According to statistics released by the US Bureau of Labor Statistics inflation decreased to 2.8% during February by a small margin below the projected figure of 2.9%. The core CPI posted a decrease to reach 3.1% although food and energy prices were excluded from the calculation. The current inflation levels exceed the Federal Reserve’s desired benchmark at 2%.
According to market analysts, the reduction of inflationary pressures will result in elevated expectations regarding Federal Reserve rate reductions. According to the CME FedWatch Tool, investors forecasted that the Federal Reserve will keep its existing interest rates during the upcoming Federal Open Market Committee (FOMC) session next week by a rate of 97%. Anthony Pompliano joins other experts who claim reported inflation figures overlook the actual rate so the Fed should take action to advance economic growth.
Ethereum Price Struggles Amid Selling Pressure
Despite Bitcoin’s rebound, Ethereum remains under pressure. ETH is currently trading at $1,873, reflecting a 1.8% decline in the past 24 hours. According to CryptoQuant CEO Ki Young Ju, Ethereum’s price has been impacted by persistent selling over the last three months. The NetTakerVolume chart indicates significant outflows, suggesting that selling pressure has intensified.
However, analysts believe that this selling activity may soon lead to a reversal. The Relative Strength Index (RSI) for ETH stands at 31, indicating an oversold condition. If ETH manages to reclaim the $2,000 psychological level, the next resistance zones could be at $2,150 and $2,400.
Dogecoin Shows Signs of Recovery as Active Addresses Surge
Dogecoin is displaying potential for a recovery as the number of active addresses on its network has surged by 47% over the past month. Analyst Ali Charts noted that active addresses increased from 110,000 to 163,000, signaling rising interest among traders.
DOGE has recently bounced from key support levels, and the increase in network activity suggests higher participation from retail investors. If buying momentum continues, Dogecoin could see a sustained rally, especially with broader market optimism returning.
XRP Gears Up for Potential Rally Amid Regulatory Progress
XRP is also positioning for a potential breakout as Ripple continues its global expansion. The company recently secured a Dubai Financial Services Authority (DFSA) license, enabling operations in one of the world’s largest crypto-friendly regions. This milestone could drive adoption and bolster XRP’s price outlook.
Additionally, the ongoing lawsuit between Ripple and the SEC is approaching a resolution, which may further impact XRP’s price. As regulatory uncertainty clears, XRP could benefit from renewed investor confidence and increased institutional interest.
Crypto Market Outlook: Will the Rally Sustain?
As inflation fears ease, the crypto market is witnessing cautious optimism. Bitcoin’s rise above $81,000 has provided momentum for altcoins, but challenges remain. Ethereum’s oversold condition, Dogecoin’s rising activity, and XRP’s regulatory developments could serve as catalysts for further price movements.
Traders are closely watching the Federal Reserve’s next move, as any indication of a shift in monetary policy could significantly impact crypto market trends in the coming weeks.
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