Ethereum Price Prediction: Rebound to $1,500 is Still Likely

Ethereum price recovery faded on Thursday after a relatively hawkish turn by the Federal Reserve. The coin was trading at $1,312, which was a few points below this week’s high of $1,350. This price is also a few points below November 4th high of $1,688.

Hawkish Federal Reserve

Etherem and other financial assets dipped on Thursday following the rate decision by the Fed. As was widely expected, the Fed decided to hike interest rates by 50 basis points. By so doing, the Fed pushed rates to the highest level in 15 years in its bid to fight inflation.

The most surprising part of the decision was how hawkish it was. In a statement, the Fed said that it will likely continue hiking interest rates in the coming months. It pointed towards another 0.50% rate increase in its next meeting in February followed by a smaller 0.25% increase in March. 

Before the meeting, analysts were expecting that the Fed would hike rates by 0.25% in February followed by 0.25% in the following month. 

Other central banks also had a hawkish turn. In the European Union, the European Central Bank decided to hike rates by 50 basis points. And in a statement, it added that it will continue its battle against inflation in a forceful manner. 

The Fed, ECB, and BoE statements were likely meant to push back against what the market was expecting. In the past few weeks, the performance of the US dollar, bond yields, and stocks has been positioning for a dovish turn. Such a tone would have worked against the Fed actions.

Ethereum price prediction

The 4H chart shows that the ETH price has been in a bullish trend in the past few weeks. In this period, it has moved from November’s low of $1,074 to a high of $1,358. It has moved above the ascending trendline shown in red. Further, the coin has moved slightly below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved below the neutral point. 

Therefore, I suspect that Ethereum price will bounce back in the coming days. If this happens, the next key level to watch will be $1,500. A drop below the support at $1,235 will invalidate the bullish view.