After the beginning of a clear correction on Friday, the price of Ethereum stabilized on Saturday.
While it still does not show a clear trend in the short term on Monday morning. Will Ethereum falter due to US monetary policy?
Last week was marked by a clear increase in expectations of an interest rate cut by the Federal Reserve.
During the monetary policy meeting held on Wednesday evening, the Federal Open Market Committee was more pessimistic than expected in its statements and forecasts.
Federal Reserve decisions manipulate the digital asset market
Following the Fed, the probability of seeing the central bank cut interest rates at its second meeting of next year, March 20, jumped to 85%.
This caused the dollar to fall, pushing it higher than all risky assets, including cryptocurrencies like Ethereum.
However, Thursday was an opportune day for these expectations to be reversed and profits to be taken.
While Friday sowed doubts more clearly, with hawkish comments from Fed member Williams. Who said the central bank is not currently discussing lowering interest rates?
These comments reduced the chances of seeing the Fed cut interest rates in the first quarter to less than 70%.
It also caused the dollar to rise, punishing Ethereum as well as most other digital assets.
Regarding the key events that will likely impact this forecast, and therefore the price of ETH, next week.
We note that the economic calendar will include several major meetings. Including US GDP on Thursday.
Then the Core Price Index (PCE) meeting, which is the Fed’s most important inflation.
Ethereum’s trend is still bullish: but it will only take a little while for the trend to change
In addition to hopes of an interest rate cut by the Federal Reserve. Bitcoin benefits more directly than Ethereum from speculation about the imminent launch of Bitcoin ETFs in the USA.
It is a historic event for Bitcoin that is supposed to happen in January according to experts…
From a technical analysis point of view, we note Friday’s correction, and in general, the weakness observed since the peak for more than a year.
Which reached more than $2,400 on December 9, does not yet raise questions about the positive trend for Ethereum.
On the other hand, a break below the $2,140 area (December 11 and 13 lows) would see a breakout from the bottom of the channel.
This will constitute a bearish signal that places the main psychological threshold at $2,000 on the horizon.
On the upside, Ethereum’s high of this week at $2,330 and the December 9 high of $2,403 will be the first hurdles to consider before the key threshold of $2,500.
In conclusion, we must remember that although Ethereum is still showing a bullish trend, this looks close to a reversal from a graphical point of view.
It’s a different situation for the Bitcoin price, which is far beyond its turning point.
