Ethereum Soars 6% in 7 Days: How High Can…
• Ethereum (ETH) is consolidating ahead of a key Fed policy announcement.
• Ether could drop to fresh weekly lows under $1,700 if the Fed’s message is interpreted as more hawkish than markets had been expecting.
• If the Fed comes across as more dovish than expected, that could trigger broad risk-on, which would likely lift Ether.
Ethereum Price Prediction
Ethereum (ETH), the second most valuable cryptocurrency in the world by market capitalization, is in consolidation mode ahead of an important Federal Reserve policy announcement. Ether was last changing hands just above $1,800 and has seen a decent bounce from earlier weekly lows in the $1,720s on Tuesday. The cryptocurrency was last up around 6% in the last seven days.
Impact of Federal Reserve Policy Announcement on Ethereum (ETH)
The US central bank is expected to lift interest rates by another 25 bps, taking the federal funds target range to 4.75-5.0%. However, following the collapse of several regional US banks earlier this month and amid signs that contagion continues to threaten dozens more, the bank is expected to soften its tone on further tightening. The Fed faces a balancing act between controlling inflation and financial stability risks that could impact Ether prices depending on their outlook for further tightening or easing measures.
Price Prediction – How High Can ETH Go in 2023?
The emergence of troubles in the traditional banking sector have shifted macro narratives driving asset classes including cryptocurrencies such as Ethereum (ETH). Money market pricing suggests a dovish pivot from the Fed now looks to be just around the corner which means easier rather than tighter financial conditions for 2023 which historically benefits Ether prices. ETH/USD bulls are eyeing a test of last August’s pre-“Merge” highs in the $2,030s – a 12% rally from current levels – as an indication for how high ETH can go in 2023 if this scenario plays out correctly.
A hawkish tone from the Fed indicating tighter financial conditions than expected could push Ether towards fresh weekly lows under $1,700 while other external factors such as regulatory developments or changes in investor sentiment also have potential to influence ETH price movements over this time period and beyond.
Overall it appears that with expectations pointing towards easier rather than tighter monetary policy from central banks globally at least for now it seems likely that relative strength will remain with assets like Ethereum (ETH) over traditional assets going forward into 2023 given their relative safety during times when macroeconomic uncertainty increases and investors move capital away from risky assets into safe havens like Bitcoin and Ether cryptocurrencies.