Ethereum Rallies on Slowing US Inflation, But Rally Fades

Ethereum's price surged on July 13th as the U.S. inflation rate slowed to 3.5%, below the forecasted 3.8% and prior reading of 4.2%. This easing in inflation sparked a rally, with buyers defending higher lows and strengthening momentum. The Dollar Index weakened, and Treasury yields eased, encouraging fresh demand for risk assets.

Binance recorded over $1.2 billion in Ethereum taker buy volume, accelerating the existing advance and lifting Ethereum's price toward the $1,895 zone. However, the rally soon lost momentum as Bitcoin attracted stronger relative demand and early buyers locked in profits.

Traders welcomed improving macro conditions but still preferred Bitcoin as the market's primary macro hedge. This shift suggests that Ethereum's advance is dependent on broader capital rotation rather than the CPI surprise alone.

According to CryptoQuant, institutional accumulation had already started shifting before the latest rally. Over the past two weeks, exchange withdrawals culminated in a 90,024 ETH net outflow on July 13th. The steady migration reduced Exchange Reserves to approximately 15.3 million ETH, with over 33% of the circulating supply now held off exchanges through staking, DeFi, and institutional custody.