Ethereum Price Retreats as Market Awaits Federal Reserve Decision
Ethereum’s native cryptocurrency, Ether (ETH), has declined by 5.73% from its weekend peak near $4,766. This pullback reflects traders’ cautious positioning ahead of the Federal Reserve’s interest rate announcement scheduled for Wednesday.
Despite the short-term retreat, market participants are closely watching for signs that a dovish shift from the Fed could rekindle Ethereum’s upward momentum. Currently, the market assigns a 96.1% probability to a rate cut this week, up from 85.4% a month prior, with expectations of two additional cuts by the end of the year.
Technical Indicators Signal Potential for Significant Upside
Ether bulls are actively defending the 20-day exponential moving average (EMA) around $4,450, maintaining a critical support level. The consolidation phase has formed a bull pennant pattern, a technical formation that often precedes a breakout to the upside. Volume trends have tapered off during this period, a typical characteristic of a mature pennant.
If ETH closes decisively above the pennant’s upper trendline, the price could surge toward $6,750 by October, representing gains exceeding 45% from current levels. This projection aligns with recent forecasts from Tesseract CEO James Harris and analyst Donald Dean.
Dip Buying Expected as Key Supports Hold
Should the 20-day EMA fail to hold, Ethereum may test lower support near the pennant’s lower trendline at approximately $4,350 and the 50-day EMA near $4,200. However, analysts generally view such pullbacks as opportunities for accumulation rather than signals of a trend reversal.
Chartist Ash Crypto suggests that even a drop below the pennant’s lower boundary would not invalidate the bullish setup, anticipating a rebound surpassing $5,000 in the near term. Similarly, TheBullishTradR notes that Ethereum could retrace into the $4,100–$4,300 range, which he terms a “super trend support” zone, before mounting a stronger recovery.
Fibonacci Retracement Supports Bullish Outlook
Analyst Luca highlights that ETH has reclaimed the “golden pocket,” defined by the 0.5 to 0.618 Fibonacci retracement levels. This zone coincides with the daily Bull Market Support Band, reinforcing the bullish narrative. Luca describes the current price action as a “Breakout → Retest setup,” where a resistance breakout is followed by a pullback to test the former resistance as support before continuing higher.
He concludes, “As long as the price holds above the golden pocket, I believe the most likely outcome is further upside.”
Disclaimer: This article does not constitute investment advice. Trading and investing involve risk, and readers should perform their own due diligence before making decisions.
FinOracleAI — Market View
The anticipation of a Federal Reserve rate cut has generated bullish sentiment for Ethereum, underpinned by technical patterns signaling a potential breakout. The bull pennant formation and Fibonacci retracement support key upside targets near $6,750. However, risks remain if key moving averages fail to hold, which could trigger short-term corrections. Investors should monitor Fed announcements closely and watch for confirmation of the breakout above the pennant resistance to validate sustained upward momentum.
Impact: positive
