Ethereum
The Ethereum price has bounced back after crashing by more than 20% a week ago. ETH is trading at $2,457, which is just 7% below its all-time high of $2,647. Its market cap has bounced back to more than $284 billion while its 24-hour volume has increased to more than $40 billion.
What happened: Last week, the price of Ethereum and other digital currencies dropped sharply as investors waited for the next major catalyst. That’s after the previous catalyst, the Coinbase direct listing came and went. Also, the currencies declined after the crypto ban by Turkey, a major participant in the industry.
This will be an important week for Ethereum price and other digital currencies. That’s because the Federal Reserve will start its meeting on Tuesday and deliver its decision on Wednesday. This will be a major catalyst because of the fact that the recent rally in digital currencies has been because of low-interest rates by the Fed.
Therefore, with the US vaccination program going on, and with the US publishing strong data, the market will be watching out for Jerome Powell’s statement. In case of a dovish Federal Reserve, we can expect that the ETH price will keep rising. However, in case Powell hints at possible higher rates, we could see a major reversal.
A hawkish Fed is a possibility. Furthermore, other central banks like the Bank of Canada and Norges Bank have already turned hawkish. And a hawkish Fed is a good thing for the bank because it will be a sign of confidence of the country’s economy.
The four-hour chart shows that the ETH price has been making a strong comeback lately. This has seen it move from below the 50% Fibonacci retracement level to above the 23.6% retracement level. It has also moved above the 25-day and 15-day exponential moving averages (EMA) while the Relative Strength Index (RSI) has been rising. Therefore, in my view, the price will keep rising as bulls target the all-time high at $2,647.
There is also a sign of a bearish breakout. Besides, the currency has formed a head and shoulders pattern, which is usually a bearish signal.
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