The Ethereum price held steady in the past few hours even after the Federal Reserve continued its hawkish trend. ETH is trading at $4,013, which is about 10% above the lowest level on Wednesday. Other coins like Bitcoin, Avalanche, and Solana have also rallied.
Ethereum jumped sharply after the latest meeting by the Federal Reserve. The bank decided to leave interest rates unchanged between 0.0% and 0.25%. This was in line with expectations. At the same time, the bank decided to slash its asset purchases by another $30 billion. This means that the bank will end the quantitative easing policy in March next year.
Most importantly, the Fed’s dot plot showed that officials expect that interest rates will rise three times in 2022.
In theory, this should have been a bearish thing for Ethereum prices. Besides, the coin has flourished in a period of low-interest rates and easy money.
Therefore, in my view, ETH prices held steady since the Fed did as Jerome Powell had hinted two weeks ago. As such, the decision was already priced in by the market. It also explains why the price has dropped by more than 18% in the past few weeks. In this case, investors sold the rumours and then bought the news.
The four-hour chart shows that the ETH price has been in a deep sell-off in the past few weeks. A closer look shows that it formed a head and shoulders pattern whose neckline was at $3,960. A head and shoulders pattern is usually a bearish sign.
Now, the coin has done a break and retest pattern. This is where it moves to retest a key level after making a breakout.
Therefore, I suspect that the coin will remain under pressure in the coming days as bears target the key support at $3,500. This view will be invalidated if the price moves above $4,300.
This post was last modified on %s = human-readable time difference 05:28