Ethereum News Today: Ethereum's Next Move Depends on Fed's Rate Cut and Dovish Signal

Ethereum's price has recently reestablished itself above the $4,000 threshold, sparking renewed optimism among investors ahead of the Federal Reserve's upcoming interest rate decision. The move follows a two-day consolidation above this critical level, though analysts caution that the broader market reaction will hinge on the outcome of the Fed's policy announcement, according to a Yahoo Finance report. Polymarket traders have priced in a 98% probability of a 25 basis point rate cut, but some experts argue that economic data supports a more aggressive 50 basis point reduction, which could catalyze a sharper rally in crypto markets. Historical trends suggest Polymarket's predictions are often accurate, adding weight to the anticipation surrounding the central bank's decision.

Market participants are not only focused on the magnitude of the rate cut but also on the potential end of quantitative tightening (QT) and the tone of the Fed's accompanying statement. These factors, analysts say, will shape the trajectory of crypto prices over the next several months. "If the Fed signals a dovish pivot, Ethereum could lead the charge," said one strategist, noting the traditional hierarchy of BTC→ETH→others in bullish cycles. BlackRock's recent bullish stance on Ethereum further underscores growing institutional confidence in the asset.

Technical analysis highlights mixed signals. On the weekly chart, Ethereum's RSI has cooled after two months of volatility, while moving averages remain $1,000 below current prices, indicating strong buyer interest. However, the asset remains below its 2021 all-time high, creating a technical ceiling that a decisive break could trigger a parabolic rally. On the daily chart, Ethereum has been range-bound below $4,000 for much of the past week, with recent buying pressure pushing it above that level but facing immediate resistance at $4,200—a key support-turned-resistance zone and the 50-day moving average.

The market's next move will likely depend on whether the Fed's policy shift is perceived as sufficiently accommodative. A 50 basis point cut could accelerate Ethereum's ascent, while a 25 basis point cut may result in a more measured uptrend. Traders are also monitoring BlackRock's Ethereum ETF strategy and broader macroeconomic indicators for additional clues.