3.5 C
Manchester
November 29, 2022
Image default
Altcoin

Goldman Sachs: By the end of the year, Ethereum could hit $8,000

ZeroHedge, quote one note from the Bank’s managing director for global markets, Bernhard Rzymelka, who would show that cryptocurrencies have been trading in line with inflation breakeven since 2019.

The analysis would be based on a graph showing a comparison between the Bloomberg Galaxy Crypto Index, on a logarithmic scale, and the 2-year US dollar inflation swap.

The comparison between the Bloomberg Galaxy Crypto Index on a logarithmic scale and the 2-year US dollar inflation swap

This comparison seems to draw a correlation between the two curves, although there is no evidence that this is actually a causal relationship. However, their conclusions are that inflation is certainly a driving force behind the recent rise in the value of cryptocurrencies.

ZeroHedge Comments:

Which is ironic, given that some of the biggest detractors of cryptocurrency are also some of the biggest Fed fanboys, who often root for the Fed’s catastrophic monetary policy; little did they know that the record increase in cryptocurrencies would be the most direct result of this policy.

Goldman Sachs: A Favorable Environment for Ethereum

Given this, Rzymelka argues that the current environment looks favorable for Ethereum (ETH), as it has been following inflation markets in a special way recently. The most recent peak at the break-even point of inflation suggests new potential if this correlation persists.

Rzymelka also adds that the recent increase to just under $4,500 could be a sign of exhaustion or a starting point for further acceleration. In that case, the price of Ethereum could rise as much as $8,000 in the next two months, assuming the aforementioned correlation with inflation persists.

Another interesting factor is the fact that the RSI has not yet reached the overbought levels seen during bullish periods in the past, which would suggest a possible new rally.

Rzymelka also points out that US inflation swaps suggest a core inflation of 2.50% or more for the next 5 years; what can bring more, long-term benefits.

Source: cryptonomist

Related posts

Facebook’s Libra project redesigns its cryptocurrency

Anupreet Kaur

Binance lists DAI and removes EOS from P2P platform

Anupreet Kaur

Cardano (ADA) dethrones Tether and is now the third largest cryptocurrency

Anupreet Kaur

Leave a Comment