Ethereum price has been stable in the past couple of hours regardless of the Fed’s hawkish announcement. It is trading $2,774, a few points above its weekly low. Other cryptos’ prices have gone up, thus hiking digital currency’s market cap to about $1.9 trillion.
Fed held its monthly monetary policy meeting on Wednesday and spoke differently from expected a few months ago. The banked hiked interest rates by 0.25%, the first since 2008.
In the speech, the bank concluded that it would keep increasing interest rates in the subsequent policy meetings of the year. If this happens, that final rate will be at 1.75% at the end of the year. The bank also suggests an increase in the hawkish trend from 0.25% to 0.50%
The Fed blamed the US economy’s state for its change in tone. The labour market has been tough, with a fall in the unemployment rate to 3.8%, while inflation has risen to the highest levels in decades.
Logically, cryptocurrencies should drop after Fed’s hawkish tone. Besides, risky assets most likely don’t do well in a hawkish environment.
The major cause for the rise in Ethereum price is the Fed’s predictable tone this month. Jerome Powell in his statement, assured an abandonment of pandemic-era policies and began increasing interest rates.
Moreover, the successful merge on the Kiln testnet is another reason for the Ethereum price rise.
Ethereum price prediction
The daily chart indicates a tight range for the ETH price in the past few weeks. Therefore, the price is trading at the 25-day and 50-day moving averages.
A closer look shows a symmetrical triangle by the Ethereum price in black. The triangle is close to its confluence zone to mean its almost getting a bearish breakout.
It’s hard to predict the breakout direction due to this pattern. However, a bearish one may occur since Ethereum has created a head and shoulders trend.