Key Takeaways
- Ether has experienced a 2% drop in the last 24 hours, trading below the $4,000 mark.
- This recent downturn follows the Federal Open Market Committee (FOMC) meeting.
Ether Drops Below $4k Following FOMC Announcement
Ether (ETH), the second-largest cryptocurrency by market capitalization, has entered a bearish phase, shedding 2% of its value in the past 24 hours. The cryptocurrency briefly dipped to the $3,800 level but is now nearing $4,000.
The selling pressure observed yesterday is attributed to the outcome of the FOMC meeting, where the Federal Reserve announced a 25 basis point interest rate cut. However, Fed Chair Jerome Powell indicated that the central bank intends to conclude its quantitative tightening program by December 1st.
Quantitative tightening involves the Fed reducing its asset holdings by selling them into financial markets, a process that can depress asset prices and increase interest rates. This suggests a reduced likelihood of further interest rate cuts by the Fed in its upcoming December meeting.
Despite the successful launch of Ethereum’s Fusaka upgrade on Hoodi, the third and final testnet before its mainnet debut, on Tuesday, the broader cryptocurrency market volatility overshadowed any potential positive price impact on ETH in the short term. The Fusaka upgrade aims to enhance scalability and security.
Potential for ETH to Reclaim $4,200 Levels
The ETH/USD 4-hour chart indicates a bearish trend, though signs of recovery are emerging following the recent decline. Ether is currently trading at $3,939 per coin, with the potential for a near-term rally.
Technical indicators, while still showing bearish sentiment, are suggesting a possible turnaround. The Relative Strength Index (RSI) at 46 indicates that the bearish momentum is waning, potentially paving the way for bullish price action in the coming hours and days. The Moving Average Convergence Divergence (MACD) lines remain in negative territory after issuing a sell signal on Wednesday.
If the recovery gains traction, Ether could potentially retest the resistance level at $4,232 in the near future. A sustained rally might push ETH towards the 4-hour Inked Liquidity Zone (ILQ) at $4,409. Conversely, a failure to surpass $4,200 could lead to a retest of the $3,800 low in the short term.
Expert Summary
Ether experienced a recent price drop below $4,000, influenced by the Federal Reserve’s FOMC meeting outcome and signals of continued quantitative tightening. While technical indicators show bearish trends, there are emerging signs of a potential recovery, with key resistance levels to watch closely.