As Ethereum lingers near $3,000 with an inverted head and shoulder in making, the chances of steady Fed rates hint at a new bull cycle. Will this recovery drive ETH price to a new all-time high?
By Vishal Dixit
Edited by Julia Sakovich
Updated
3 mins read
The crypto market anticipates a surge in volatility amid the upcoming Federal Open Market Committee (FOMC) meeting with the majority of the players expecting the rates to remain steady. Amid such conditions, Ethereum ETH $1 603 24h volatility: 8.4% Market cap: $193.34 B Vol. 24h: $34.95 B , the biggest altcoin in the market, stands at a significant crossroads near its $3,000 psychological mark.
As an unexpected move could send the market on a high-momentum move on either side, ETH price is preparing for a reversal rally. Will the upcoming FOMC meet be the driving force to break past the $4,000 resistance?
Currently, Ethereum maintains a pullback phase after reaching the $4,000 mark in early December 2024. Since then, over the past two months, the Ethereum price has significantly declined to the current market price of $3,168.
While it stagnates above the 50-week SMA line, the lower price rejection in the weekly candles projects a potential reversal rally. The pullback phase forms a falling-wedge pattern, and a bullish reversal will likely give a breakout rally.
Based on the price action analysis, the weekly price chart in Ethereum reveals stronger resistance at the $4,000 mark.
Adding significance to the $4,000 psychological mark, Ali Martinez reveals an inverted head and shoulder pattern in the Ethereum price trend. The neckline for the bullish pattern coincides with the $4,000 psychological mark.
This head-and-shoulders pattern on #Ethereum $ETH is becoming overcrowded. I see everyone on X is sharing it.
If the pattern holds, any dip to $2,900 could be a buying opportunity, but keep your stop-loss tight between $2,700 and $2,500. pic.twitter.com/O1zPXZjFBs
— Ali (@ali_charts) January 28, 2025
Currently, the Ethereum price trend struggles to form the right-shoulder part of the bullish pattern. In his recent tweet, the analyst suggests a bullish continuation if Ethereum holds above the $2,900 mark.
However, a tight stop-loss is suggested between $2,700 and $2,500. In case of a bullish reversal surpassing the $4,000 mark, ETH price is likely to hit a new all-time high.
One of the key driving factors for Ethereum to a new all-time high will be the upcoming meeting of the Federal Market Open Committee (FOMC). As per the recent data by CME Group FedWatch, 99.5% of the markets, 99.5% of the 5% there’s a probability of 99.5% of the Fed keeping the rates steady between 4.25% and 4.5%.
In April 2021, when the Fed maintained its view to hold the rates steady, Ethereum price went into a massive bullish shockwave. This resulted in a 69% surge within two weeks from $2,321 to $3,928. A similar price move could result in a price rally in Ethereum to $4,750.
The 0.5% probability of a 25 basis point rate cut will likely boost the broader market sentiment. As the institutions will have the flexibility to grab risky assets like Bitcoin and other cryptocurrencies, the institutional flow in the Ethereum ETFs could witness a massive surge.
As the institutional pool grows, Ethereum price will likely create a new all-time high, surpassing the $5,000 mark. Furthermore, based on the inverted head-and-shoulder breakout in Ethereum will likely propel it to $7,000 levels.
Hence, Ethereum is on the verge of hitting a new all-time high if it sustains above the $2,900 level.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Vishal, a Bachelor of Science graduate, began his journey in the crypto space during the 2021 bull run and has since navigated the subsequent market winter. With a strong technical background, he is dedicated to delivering insightful articles rich in technical details, empowering readers to make well-informed decisions.
