Ethereum (ETH) is poised for a significant price rally in the near future due to a confluence of macroeconomic factors and technical patterns. A sharp decline in the US Dollar Index (DXY) coupled with the expansion of the Global M2 Money Supply add credence to that the risk-on assets are likely to rally. The Wyckoff Accumulation pattern noted on ETH price adds further credence that a bullish reversal to potentially $4,000 is likely.
DXY Decline and Global M2 Surge: A Tailwind for Ethereum Price?
The U.S. Dollar Index (DXY), which measures the dollar’s strength against a basket of major currencies, dropped 3.90% since February 28, 2025. A weaker dollar typically boosts risk assets like cryptocurrencies as investors seek higher returns in alternative investments. So, investors can expect the declining dollar to boost Bitcoin and Ethereum prices higher.
Additionally, the global M2 money supply, which is a broad measure of money in circulation, including cash, checking deposits, and other liquid assets, has also risen by 1.87%, from $105.4 trillion to $107.4 trillion since mid-January 2025. This expansion in liquidity is a perfect combination that further pushes investors to seek higher returns in risk assets. History shows that similar conditions have driven crypto bull cycles in the past and could catalyze a rally for Bitcoin and Ethereum prices as well.
Crypto analyst Sam Mandal noted,
“Ethereum thrives in environments of loose monetary policy and increased liquidity. The combination of a declining DXY and a rallying global M2 money supply creates an ideal setup for Ethereum to capitalize on market momentum.”
Ethereum’s Wyckoff Accumulation Pattern: A Springboard to $4,000 and Beyond?
Adding to the macroeconomic bullish narrative is Ethereum price action forming a Wyckoff Accumulation pattern, as noted by prominent crypto analyst Louie. According to his recently shared post on X, ETH is in the “spring” phase, which is often followed by a bullish reversal if certain conditions are met. The spring phase is when price dips below key level, indicating a potential smart money accumulation.
In the post, Louie highlighted that if Ethereum price recovers above the key support level at $2,300, it could kickstart a bullish reversal. In such a case, ETH’s value could explode to the next key hurdle at $4,000.
“Smart money thinks in terms of years, not weeks,” Louie wrote, emphasizing the long-term accumulation strategy at play. Depending on the momentum at $4,000, he hinted that bullish Ethereum price prediction could extend its rally to $5,000, driven by strong market sentiment and technical support.
Conclusion: Ethereum’s Bright Future Ahead
As of March 8, 2025, Ethereum appears primed for a significant price rally, driven by a weakening U.S. dollar, expanding global liquidity, and a textbook Wyckoff accumulation pattern. With the DXY down 3.90% since February 28 and global M2 money supply up 1.87% since January, the macroeconomic environment is highly favorable for risk assets like ETH. Combined with technical signals pointing to a recovery above $2,300 and a potential target of $4,000 or $5,000, Ethereum investors have reason to be optimistic.
The post Can Ethereum Price Hit $4,000 as Global M2 Money Supply Soars and DXY Declines? appeared first on CoinGape.
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