Bitcoin and Ethereum Price Prediction Ahead of US CPI and ECB Rate Decision

Bitcoin (BTC) price is down by 1.75% today, September 5, to trade at $79,599 at the time of writing. Ethereum (ETH) is also down by 2.45% to trade at $2,455, with these drops coming ahead of the release of the US CPI data on September 11 and a potential rate hike by the European Central Bank (ECB).

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Bitcoin and Ethereum Price in US CPI and ECB Rate Decision

The recent US jobs data report, which showed that the US labor market is becoming strong, increased the odds of the Federal Reserve hiking interest rates during the September 16 FOMC meeting.

Data from CoinGape prediction markets currently shows that there is a 50% chance that the Fed will hike interest rates by 25 basis points, while another 50% of investors are betting on the Fed leaving rates unchanged.

Attention has now moved to the release of the US CPI report. Data from MarketWatch shows that investors are expecting US inflation to remain unchanged at 3.4%.

If the CPI comes in lower than the expected 3.4%, it could reduce the odds of the Fed trimming rates and could make President Trump’s argument that the Fed should lower rates stronger.

However, while there is uncertainty about the decision that the Fed will make, the market is pricing in a 100% chance that the European Central Bank (ECB) will hike rates by 25 basis points on September 10.

This hike could push Bitcoin and Ethereum prices lower because hawkish central bank decisions tend to push investors away from risk assets.

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BTC and ETH ETF Sustain Inflows Despite Inflation Concerns

Data from SoSoValue shows that there were inflows to both Bitcoin and Ethereum ETFs on September 4 despite the rising possibility of the Fed hiking interest rates after US non-farm payrolls exceeded expectations and came in at 162,000.

The inflows to Bitcoin ETFs came in at $174 million, while ETH ETFs saw $26 million in inflows, suggesting that demand from institutions is high despite the hawkish outlook.

These inflows also suggest that institutions are ignoring the concerns around inflation after Bloomberg reported that nearly half of US goods and services prices have risen faster than 3%.

Still, BlackRock’s portfolio manager Jeff Rosenberg links these ETF inflows to market pricing in that even a 25 basis point hike will not affect stocks.

Bitcoin Price Forecast as Short-Term Holders Book Profits

Bitcoin price has dropped below the psychological support of $80,000. A previous CoinGape Bitcoin price analysis noted that the downtrend could continue until the price reaches the lower Bollinger band of $75,335.

This drop comes amid a surge in profit-taking by short-term holders. Data from CryptoQuant shows that short-term holders have sent 467,000 BTC, valued at $35.4 billion, to exchanges since August 17.

The report also adds that the cohort is sending an average of 27,500 BTC every day to exchanges, with this transfer being 29% higher than the previous 3-month average.

Still, Bitcoin price has been creating higher highs despite this STH selling, suggesting that the demand is absorbing the coins that traders are selling.

Ethereum Price Prediction as Bulls Test 200-week EMA Resistance

The price of Ethereum has risen to test the resistance at the 200-week EMA of $2,455. ETH has tested this resistance for three straight weeks without closing above it.

If ETH closes above $2,455, it will support a bullish long-term Ethereum price outlook. A close above this EMA will suggest that the uptrend could continue in the long-term if market sentiment recovers and Bitcoin also surges.

Ethereum price is also facing another resistance at $2,555. Past trends show that Ethereum recorded a strong gain whenever it confirmed a close above this obstacle. However, each failed breakout has pushed the price to the support at $2,215.

The RSI reading of 58 suggests that the momentum is favoring bulls, and this could support a breakout from the resistance of $2,555.