Ether (ETH), the native token of Ethereum, has decreased by 5.73% from its weekend peak around $4,766, as traders reduce their risk in anticipation of Wednesday’s Federal Reserve interest rate announcement.
This drop indicates a cautious market, but the key question is whether a potential dovish shift from the Fed could spark a renewal in Ethereum’s rally and how significant this movement might be.
ETH price could surge 45% in a breakout scenario
ETH enthusiasts are defending the 20-day exponential moving average (20-day EMA; the green wave) near $4,450, demonstrating strength as markets factor in a 96.1% likelihood of a Fed rate cut this week, up from 85.4% a month ago, with expectations of two additional cuts by year-end.
The current consolidation has formed a bull pennant, a continuation pattern that typically precedes another upward movement. Volumes have gradually decreased during this setup, signaling a mature pennant formation.
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The chart pattern suggests a potential move towards $6,750 by October, representing over a 45% increase from current levels, if ETH decisively closes above the upper trendline of the pennant.
This upside target for ETH aligns with forecasts made by Tesseract CEO James Harris and analyst Donald Dean.
Analysts suggest buying dips in ETH
A failure to maintain the 20-day EMA might lead to further declines towards the lower trendline of the triangle (~$4,350) and the 50-day EMA (the red wave) near $4,200.
However, many analysts believe these dips will likely lead to increased buying interest, pushing the ETH price higher.
This includes chartist Ash Crypto, who noted that dropping below the pennant’s lower trendline wouldn’t negate the bullish setup but rather propel prices above $5,000 in the upcoming weeks.
Chartist TheBullishTradR shares a similar perspective, indicating that Ethereum could still retrace into the $4,100–$4,300 “super trend support” area prior to a more significant upward reversal.
Meanwhile, analyst Luca notes Ethereum has reclaimed the golden pocket (0.5–0.618 Fibonacci retracement lines), with the price now closely aligning with this zone and the daily Bull Market Support Band.
He interprets this as a classic “Breakout → Retest setup,” where the price surges above resistance, then pulls back to test it as support before moving higher. 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 when making a decision.
