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Ethereum Holds 20-Day EMA Support Ahead of Key Fed Decision
Ethereum (ETH) slipped 5.73% from its weekend high near $4,766, retreating to around $4,510 as traders reduced risk exposure ahead of Wednesday’s Federal Reserve interest rate decision. While the pullback signals caution across crypto markets, the bigger question remains: can a potential dovish Fed spark Ethereum’s next major rally?
ETH Price Holds Key Support at 20-Day EMA
Despite the recent dip, Ether bulls are holding firm at the 20-day exponential moving average (EMA) near $4,450. This technical level has become a crucial battleground as market sentiment shifts around Fed policy.
According to CME FedWatch data, traders are pricing in a 96.1% probability of a rate cut this week—up significantly from 85.4% a month ago. Moreover, expectations suggest at least two additional reductions before year-end, adding fuel to hopes for looser monetary policy that could benefit risk assets like crypto.
For Ethereum, the timing is critical. A decisive bounce from current support could mark the start of a new leg higher.
Bull Pennant Formation Signals Breakout Potential
Ethereum’s price action over the past weeks has carved out a bull pennant pattern—one of the most recognized continuation setups in technical analysis. This formation typically develops when prices consolidate in a narrowing range after a sharp move higher, with declining volumes signaling reduced selling pressure.
ETH trading volumes have steadily decreased during this consolidation, matching the textbook signs of a maturing pennant setup. If Ether breaks above the pennant’s upper trendline with conviction, analysts say the move could trigger a powerful upside extension.
The projected breakout target? Around $6,750 by October—a gain of more than 45% from current levels.
Analysts Align on Bullish Ethereum Targets
The bullish scenario isn’t just a matter of chart patterns. Industry voices are echoing similar upside expectations. Tesseract CEO James Harris and crypto analyst Donald Dean have both outlined Ethereum price targets that align with the pennant projection, further boosting confidence among ETH supporters.
While short-term volatility around the Fed meeting could shake markets, the long-term technical and macro backdrop continues to favor Ethereum’s potential to outperform.
Fed Policy Could Be the Catalyst
All eyes now turn to the Federal Reserve. The central bank’s messaging around interest rates has been a critical driver for global markets in 2025, with crypto closely tied to shifts in liquidity conditions.
A dovish tilt from the Fed—especially confirmation of a rate cut—could reduce borrowing costs, weaken the U.S. dollar, and boost demand for alternative assets like Ethereum. Conversely, a more cautious stance could extend ETH’s consolidation phase.
Either way, the Fed’s decision is likely to be a make-or-break moment for Ethereum’s near-term trajectory.
