Key Points
- The crypto market anticipates volatility ahead of the Federal Open Market Committee (FOMC) meeting, with Ethereum at a pivotal point near the $3,000 mark.
- Ethereum’s price is preparing for a possible rally, with the upcoming FOMC meeting potentially acting as a catalyst to break past the $4,000 resistance.
Many in the crypto market are expecting a surge in volatility as the Federal Open Market Committee (FOMC) meeting approaches.
The majority of market players expect the rates to remain steady.
Ethereum at a Crossroads
Amid these conditions, Ethereum, the largest altcoin, is at a significant crossroads near its $3,000 psychological mark.
An unexpected move could trigger a high-momentum move in either direction, and the Ethereum price is gearing up for a potential reversal rally.
The question arises: could the upcoming FOMC meeting be the driving force to break past the $4,000 resistance?
Strong Support for Ethereum Near $3,000
Currently, Ethereum is in a pullback phase after reaching the $4,000 mark in early December 2024.
Over the past two months, the Ethereum price has significantly declined to the current market price of $3,168.
Despite stagnating above the 50-week SMA line, the lower price rejection in the weekly candles suggests a potential reversal rally.
The pullback phase forms a falling-wedge pattern, and a bullish reversal could trigger a breakout rally.
Price action analysis reveals stronger resistance at the $4,000 mark.
Potential for $4,000 Breakout
Adding weight to the $4,000 psychological mark, Ali Martinez has identified an inverted head and shoulder pattern in the Ethereum price trend.
The neckline for this bullish pattern coincides with the $4,000 psychological mark.
Currently, the Ethereum price trend is struggling to form the right-shoulder part of the bullish pattern.
In a recent tweet, the analyst suggests a bullish continuation if Ethereum holds above the $2,900 mark.
A tight stop-loss is advised between $2,700 and $2,500.
If a bullish reversal surpassing the $4,000 mark occurs, the Ethereum price could potentially reach a new all-time high.
FOMC Meeting as Catalyst
The upcoming FOMC meeting might be the key driver for Ethereum to reach a new all-time high.
According to recent data by CME Group FedWatch, there’s a 99.5% probability of the Fed keeping the rates steady between 4.25% and 4.5%.
In April 2021, when the Fed decided to hold the rates steady, Ethereum price experienced a significant bullish shockwave, resulting 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.
Possibility of a Rate Cut
The 0.5% probability of a 25 basis point rate cut could potentially boost the broader market sentiment.
As institutions will have the flexibility to acquire risky assets like Bitcoin and other cryptocurrencies, the institutional flow in the Ethereum ETFs could see a massive surge.
As the institutional pool grows, Ethereum price could potentially create a new all-time high, surpassing the $5,000 mark.
Furthermore, based on the inverted head-and-shoulder breakout in Ethereum, it could potentially propel to $7,000 levels.
Therefore, Ethereum is on the brink of hitting a new all-time high if it maintains above the $2,900 level.
