Ethereum price forecast: break and retest pattern forms

Ethereum price bounced back on Wednesday as the market refocused on the upcoming interest rate decision by the Federal Reserve. ETH rose to a high of $1,460, which was significantly higher than this week’s low of $1,356. 

Fed decision ahead

Ethereum price staged a strong recovery this month that saw it soar to a multi-month high of $1,665. This rally happened as investors bought the dip as they anticipated the upcoming merge. The combination of the current version with the Beacon Chain is expected to take place in September of this year. 

Once complete, the merge will bring the biggest shift in the blockchain industry in years because of the important role that Ethereum plays in it. It will make popular applications built on Ethereum like Aave, Uniswap, and Compound faster and less costly.

Ethereum price also jumped because of the strong inflows in the decentralised finance (DeFi) industry. The total value locked (TVL) across the sector rose from over $72 billion to about $85 billion. This was a strong recovery considering that the sector has been under intense pressure in the past few months.

ETH price is now bouncing back for two main reasons. First, the US dollar index has pulled back slightly ahead of the upcoming FOMC decision. The bank is expected to publish the latest decision during the American session.

Analysts expect that the bank will hike interest rates by another 0.75%. If this happens, it means that the Fed will have increased rates by 225 basis points this year alone. The US dollar is possibly retreating as investors price in a less hawkish statement from Powell.

Ethereum price is also rising as the stock market recovers. Futures tied to the Dow Jones, S&P 500, and Nasdaq 100 rose by more than 1% after the mixed earnings by companies like Microsoft and Google.

Ethereum price prediction

The 4H chart made a strong bearish breakout on Tuesday as the crypto sell-off accelerated. It reached a low of $1,356, which was the lowest level since July 18th. The coin managed to move below the 25-day and 50-day moving averages. At the same time, it invalidated the bullish flag pattern that is shown in black.

Now, Ethereum price is attempting to retest the lower side of the ascending channel. This is known as a break and retest pattern, meaning that the coin will likely have a bearish breakout in the near term. If this happens, the next key point to watch will be at $1,278.

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