US equities experienced a remarkable surge following the release of the Consumer Price Index (CPI), with major indices including the S&P 500, Nasdaq, and Dow Jones reaching all-time highs. The rise in stock prices coincided with a weaker US dollar, which has been feeling pressure from rate markets currently anticipating a 50 basis point cut by the Federal Open Market Committee (FOMC). While expectations are fluid, the immediate reactions to the CPI report briefly adjusted these odds before they were elevated again to just above 10%.
Market participants are keenly awaiting insights from prominent financial journalists, particularly Timiraos from the Wall Street Journal, known for his analysis ahead of FOMC meetings. However, this strong performance in equities has not mirrored the sentiment in the cryptocurrency markets. Although Bitcoin showed signs of recovery since dropping to $108,000 last week, Ethereum has struggled to regain its upward momentum. Meanwhile, the broader altcoin market has not reflected the bullish trends seen in traditional risk assets during the trading day.
As traders prepare for next week’s crucial FOMC decision, the cryptocurrency markets are looking for indications of a changing technical outlook. The crypto environment presents a mixed picture, with market observers advised to track other risk assets and key players—such as Solana— to gain insights into flow dynamics.
Diving deeper into Ethereum’s market performance, a multi-time frame analysis reveals that the second-largest cryptocurrency has been consolidating prices above the 4,200-4,500 momentum pivot since the last assessment. Recent metrics indicate that momentum has decreased from extremes of overbought conditions back to slightly above neutral. This adjustment sets the stage for potential price activity in the upcoming weeks.
This state of price and momentum consolidation appears to lay a foundation for higher volatility. If positive market sentiment persists, Ethereum (ETH-USD) may establish a solid base for a rebound. However, any failure to rebound could pose a significant risk to the current outlook, emphasizing the importance of close monitoring as conditions evolve.
