Ethereum’s native token, Ether (ETH), has experienced a decline of 5.73% from its weekend high of approximately $4,766. This retreat highlights a cautious sentiment within the market as traders adjust their positions ahead of the upcoming Federal Reserve interest rate decision scheduled for Wednesday.
The recent price pullback raises questions about the potential effect of a dovish shift from the Federal Reserve on Ethereum’s resurgence. Analysts are closely monitoring whether a favorable shift in monetary policy could reignite ETH’s upward momentum and how significant this movement could be.
Currently, Ether bulls appear to be defending the 20-day exponential moving average (EMA) near $4,450, showcasing resilience amidst rising expectations of a 96.1% likelihood of a Federal Reserve rate cut this week, up from 85.4% a month ago. Additionally, traders are anticipating two more rate reductions by the end of the year.
The present consolidation phase has formed what is known as a bull pennant, a pattern that typically precedes further upward movement. A notable aspect of this formation is the steady decline in trading volumes, which often indicates a maturation of the pennant setup. Should ETH manage to close decisively above the pennant’s upper trendline, projections indicate a potential breakout target around $6,750 by October, suggesting an increase of over 45% from current levels.
However, should the price fail to hold at the 20-day EMA, there is a risk of a further decline towards the triangle’s lower trendline, estimated around $4,350, and the 50-day EMA, located near $4,200. Nevertheless, many analysts believe that any drop would likely lead to renewed buying interest, thus setting the stage for a rebound.
Chartist Ash Crypto has pointed out that even a dip below the pennant’s lower trendline would not negate the bullish outlook but could instead trigger a rally exceeding $5,000 in the upcoming weeks. Another analyst, TheBullishTradR, echoed this sentiment, suggesting a possible retreat into the $4,100–$4,300 “super trend support” zone before a more significant upward correction takes place.
Additionally, analyst Luca observed that Ether has reclaimed the golden pocket, characterized by the 0.5–0.618 Fibonacci retracement levels, with the price aligning closely to this zone and the daily Bull Market Support Band. He notes that this situation presents a classic “Breakout → Retest setup,” wherein the price exceeds resistance levels only to pull back and test them as support before continuing on an upward trajectory. Luca emphasized that as long as ETH maintains its position above the golden pocket, the outlook for further price appreciation remains optimistic.
As investors navigate these volatile conditions, this analysis does not constitute investment advice. Potential investors are encouraged to conduct thorough research given the inherent risks associated with trading and investing.
