Ethereum (ETH) Drops 5.73% Amid Federal Reserve Decision – Potential 45% Upside Looms

Ethereum (ETH) has slipped 5.73% from its weekend high of $4,766, trading near $4,498, as traders exercise caution ahead of the Federal Reserve's impending interest rate decision. This pullback reflects a climate of risk aversion as the market speculates on whether the Fed may adopt a dovish stance—a move that could reignite Ethereum’s upward trajectory and potentially spark a substantial rally.

Federal Reserve Policy & Ethereum Sentiment

The Federal Reserve's interest rate decision is a critical focal point for Ethereum investors. Currently, the market is pricing in a 96.1% probability of a rate cut, with expectations for two more cuts later this year. A dovish pivot could create favorable conditions for Ethereum and other digital assets, boosting liquidity and driving renewed buying interest.

Bullish Technical Indicators Point to 45% Rally

Ethereum is forming a "bull pennant" on its daily chart—a continuation pattern that signals the possibility of substantial price gains. The pennant is in its maturity phase, with declining trading volumes supporting the likelihood of a breakout.

Should Ethereum breach the upper trendline of this pattern and close above key resistance levels, analysts predict its price could surge beyond $6,750, marking a 45% increase by October. This forecast corresponds with predictions from top experts in the crypto space, including James Harris, CEO of Tesseract, and analyst Donald Dean.

Donald Dean, in his September 3, 2025 analysis, pointed toward Ethereum breaking out of its descending wedge formation, targeting successive price levels such as $5,766, $6,658, and a long-term high of $9,547.

Buy-the-Dip Opportunities

In the event Ethereum fails to hold above its 20-day Exponential Moving Average (EMA) at $4,450, it may see further corrections to the lower trendline near $4,350 or even the 50-day EMA at approximately $4,200. However, these dips are widely regarded as prime buying opportunities by analysts.

Chartist Ash Crypto emphasized that even a temporary dip below Ethereum’s lower trendline would not invalidate its bullish outlook. He anticipates Ethereum surpassing $5,000 within weeks, sharing a technical chart that supports this scenario.

Similarly, The Bullish Trader has identified the $4,100–$4,300 range as a “super trend support zone,” suggesting that ETH could rebound sharply after testing these support levels.

Fibonacci Strength & Long-Term Upside

Another bullish signal comes from Ethereum’s reclaiming of the 0.5–0.618 Fibonacci retracement zone—known as the "golden pocket"—which matches its daily bullish support band. Analyst Luca described this movement as a "breakout and retest" pattern. He maintains that so long as Ethereum holds above the golden pocket, the likelihood of further upside remains dominant.

Critical Price Levels to Monitor

• Current Price: $4,498 (-5.73%)
• Resistance Targets: $4,955, $5,766, $6,658
• Key Support Zones: $4,350 (lower trendline), $4,200 (50-day EMA)
• Bullish Formation: Bull Pennant

Federal Reserve's Role in Ethereum’s Trajectory

Investors are staying vigilant as the Federal Reserve’s decision could act as a significant catalyst for Ethereum’s next move. A dovish stance may provide tailwinds not only for ETH but for the broader cryptocurrency market, signaling increased investor confidence and liquidity inflows.

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