The latest update on the May US Consumer Price Index (CPI) revealed a minor dip in inflation, shifting from 3.4% in April to 3.3%. This development triggered a significant market upswing, driving a notable recovery in major cryptocurrencies. While Bitcoin approaches the $70,000 threshold, Ethereum (ETH) has observed heightened purchasing activity, challenging pivotal price points alongside an uptick in on-chain measures.

Impact of Positive CPI Report

May's data on the US Consumer Price Index defied expectations by holding steady, avoiding the predicted 0.1% increment and declining from April's 0.3%. Annually, the CPI surged by 3.3%, aligning with projections but slightly under the previous month's 3.4%.

Excluding volatile segments like food and energy, the core CPI rose by 0.2% in May, surpassing estimates of a 0.3% rise and matching April's rate. Year-on-year, the core CPI climbed to 3.4%, surpassing the expected 3.5% and dropping from April's 3.6%.

Responding to the favorable CPI data, the crypto market witnessed an upsurge, with Bitcoin edging closer to $70,000 and Ethereum testing the patience of buyers at $3,700. Noteworthy data from IntoTheBlock illustrated a significant surge in substantial transaction volumes over the last 48 hours, with Ethereum whales conducting transactions exceeding $13 billion.

This surge in whale activity implies strategic accumulation of ETH at varying price levels, enhancing market volatility. Despite this, Ethereum's network metrics exhibited declines in specific aspects over the past 90 days. Glassnode's analysis revealed a drop in daily active addresses on the Ethereum network, declining from 622,963 on March 20 to 458,400 on June 10, with a 1.2% reduction in the last 48 hours alone.

While Ethereum leads the layer 1 category, Solana has been making headway, particularly in on-chain activity. As per DappRadar data, Ethereum's NFT volume witnessed a 9% decline in the past week to 105 million, potentially signaling bearish trends for ETH despite recent price rebounds.

Forecast for Ethereum Price Movement

Ethereum's current trajectory is marked by an upward trend but faces resistance around $3,660, potentially indicating profit-taking among short-term traders. Buyers have successfully breached immediate Fib channels and are now eyeing a surge above EMA trend lines. Presently, ETH is trading at $3,624, showing a 3.3% surge in the past 24 hours.

Continued buying momentum could suggest a successful conversion of $3,430 into a support level, increasing the chances of a push towards the $3,740 target. An extended breakthrough may propel the price towards the $4,000 level.

Conversely, a downturn may manifest through a fracture and sustained closure below the $3,430 support mark. A breach below this critical level could heighten selling pressure, potentially leading to a decline towards $3,172.