Key Points
Ethereum (ETH) saw a significant price drop as a result of the Federal Reserve’s hawkish interest rate announcement. This led the cryptocurrency to decline to a critical support level.
The Impact on Cryptocurrencies
The price of Ethereum fell to $3,540, a 10% drop from its peak earlier in the week. This price drop coincided with a sell-off of other cryptocurrencies such as Bitcoin (BTC) and Solana (SOL).
However, despite the price drop, Ethereum’s fundamentals remain strong. Ethereum Exchange-Traded Funds have seen consistent inflows, now totaling over $2.46 billion.
These inflows have been increasing for 18 consecutive days. This reflects a growing interest from investors.
Investors are showing an interest in Ethereum ETFs as they anticipate that the SEC may soon allow staking within these funds. The absence of staking options may have deterred some institutional investors from fully embracing these ETFs.
Funds from companies like Grayscale, Blackrock, Fidelity, Bitwise, and VanEck hold the largest amount of Ethereum.
The number of staked ETH coins has also been increasing. Over 54.7 million ETH tokens are now staked, supported by over 206,000 unique stakers.
This trend shows a long-term bullish sentiment among investors who plan to hold their ETH positions.
Ethereum remains the biggest player in the blockchain industry. The total value locked in its Decentralized Finance ecosystem has risen to over $73.7 billion.
This is significantly higher than most other chains like Solana, Base, and Arbitrum, combined.
Ethereum’s price retreated after the Federal Reserve cut interest rates and maintained a hawkish tone. The Fed now expects to cut rates two times instead of four in 2025. Cryptocurrencies and other risky assets perform well when the Fed has a dovish tone.
Analysis of Ethereum’s Price
The daily ETH chart shows a sharp reversal after the price reached $4,090. This is a critical resistance level. This level corresponds to the December 6 and March 11 highs, as well as the extreme overshoot level on the Murrey Math Lines.
Ethereum has formed a bearish double-top pattern at this resistance. Its neckline is positioned at $3,526. This pattern could signal potential further declines.
ETH could potentially test the major support and resistance pivot point at $3,125. More gains will be confirmed if Ethereum rises above the resistance level at $4,090.