The Ethereum (ETH) price has bounced back above $2,350 levels, but market analysts believe that the coin is still at risk. Historical data shows that the upcoming Fed rate cuts could negatively impact the altcoins.
Impact of Fed Rate Cuts on Ethereum Price
Crypto analyst Benjamin Cowen recently stated that the current wedge pattern of the Ethereum price is very similar to the 2019 lows. Back then, ETH fell back to its wedge before the first rate cut, resembling a similar pattern to the present cycle in 2024. Following the first rate cut in 2019, ETH dropped below its wedge, and ETH/BTC eventually reached a bottom. Cowen predicts that ETH could drop to $1,200 by December based on historical data.
Institutional Selling of ETH
Recent activity from major players like the Ethereum Foundation and Vitalik Buterin shows that they have reduced their ETH holdings in recent weeks. According to recent blockchain data, Hong Kong-based asset manager Metalpha has sold nearly 40% of its ETH holdings over the past four days, sending a total of 33,589 ETH worth around $77.55 million to cryptocurrency exchange Binance.
Factors Influencing ETH Price
The broader crypto market has been closely watching macroeconomic developments and the upcoming Fed rate cuts next week. Popular economist Peter Schiff noted that Fed rate cuts won't prevent a recession and may even worsen the economic situation by increasing long-term rates and inflation.
Despite the recent rise in ETH price above the $2,350 level, upcoming events related to the Fed rate cuts and active selling of ETH by large institutions may pressure the cryptocurrency's price. Market analysts continue to closely monitor the situation.
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