Ether (ETH), the native token of Ethereum, has dropped 5.73% since peaking at around $4,766 over the weekend, as traders reduce exposure ahead of the Federal Reserve’s interest rate decision on Wednesday.
This pullback illustrates market caution, but a key question remains: will the Fed’s potential dovish stance boost Ethereum’s rally, and to what extent?
ETH price could surge 45% in a breakout scenario
Bullish investors are defending the 20-day exponential moving average (20-day EMA; green wave) near $4,450, demonstrating resilience as the market prices in a 96.1% chance of a Fed rate cut this week, rising from 85.4% a month earlier, with two additional cuts anticipated by year-end.
This consolidation has formed a bull pennant, a pattern that typically precedes another upward movement. Trading volumes have gradually declined during this formation, indicating a maturing pennant setup.
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The chart pattern suggests a target price of $6,750 by October, representing over a 45% increase from current levels, should ETH close decisively above the upper trendline of the pennant.
This ETH target aligns with projections made by Tesseract CEO James Harris and analyst Donald Dean recently.
Analysts suggest ETH dips are for buying
If the 20-day EMA is not defended, further decline could lead to levels near the triangle’s lower trendline (~$4,350) and the 50-day EMA (red wave) around $4,200.
However, many analysts believe these declines will likely trigger additional dip-buying, driving ETH prices higher.
This includes chartist Ash Crypto, who posits that dropping below the pennant’s lower trendline wouldn’t negate the bullish setup but would instead propel prices over $5,000 in the near future.
Chartist TheBullishTradR shares a similar sentiment, suggesting that Ethereum could retrace to the $4,100–$4,300 “super trend support” zone before making a more significant upward reversal.
Meanwhile, analyst Luca notes that ETH has reclaimed the golden pocket (0.5–0.618 Fibonacci retracement lines), with the price now aligning closely with this zone and the daily Bull Market Support Band.
He views this as a classic “Breakout → Retest setup,” where the price breaks above resistance, then pulls back for a test as support before continuing to climb. He added:
“As long as the price holds above the golden pocket, I believe the most likely outcome is further upside.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making decisions.
