Ethereum Price Rebounds Towards $3,000 After Fed Hikes Interest Rates

  • Ethereum price continues to rise during Wednesday night’s trading session.
  • Ethereum’s significant upside potential may remain above $2,775.
  • Downside risks remain a concern and they are substantial.
Ethereum price reacted bullishly to a somewhat hawkish increase in interest rates from the Federal Reserve. Similarly, risk markets around the world had a positive response, indicating that market participants believed the rate hike was already priced in.

Ethereum price must maintain its bullish momentum, otherwise a huge bullish trap could develop

Ethereum’s price action has been very volatile over the past few weeks. A series of major bearish continuation patterns were confirmed, but the bears could not refuse to push Ethereum lower. Instead, buyers and sellers were likely waiting for the Fed to announce its decision before taking action.

After the Fed announced an expected rate hike of 25 basis points, Ethereum responded positively. However, on the weekly Ichimoku chart, Ethereum price is currently testing the first resistance band at $2,775, which is comprised of the weekly Tenkan-Sen and the 2022 volume checkpoint.

Above the $2,775 resistance cluster is an even stronger and more decisive zone of resistance containing the 50% Fibonacci retracement and the top of the Ichimoku cloud (Senkou Span A) at $2,900. So ultimately, if Ethereum price wants to establish a new uptrend, it will need to close above the weekly Ichimoku cloud at or above $2,925.

Ichimoku Kinko Hyo ETH/USD Weekly Chart

If Ethereum price cannot close the weekly candlestick above $2,775, then a very likely bearish continuation move is likely to occur. Therefore, potential short-sellers in the take-profit zone would target a return to the bottom of the Ichimoku cloud (Senkou Span B) at $2,300.

Bulls have a tough road ahead because to invalidate any short-term bearish outlook, the hurdles to cross are many and difficult to overcome. As a result, significant volume and momentum will be required.

Leslie M. Gill