Ethereum Price News: Post-FOMC Dump Hits Key Structural Level – Can ETH Recover?

Ethereum (ETH) has dropped by nearly 6% in the past 24 hours, just a day after the Federal Reserve cut interest rates for the third time this year. Here’s why today’s decline could have significant implications for its short-term outlook.

Trading volumes have gone up by 35% during this period, indicating that the selling pressure is increasing.

Meanwhile, data from CoinGlass shows that long liquidations have spiked to $400 million in the past 24 hours, although most of them happened during yesterday’s session.

Analysts had already priced in this rate cut, so it was no surprise to the market that Powell leaned toward lowering rates.

Hence, this looks like a regular “sell the moment” news, but its timing cannot be any worse as ETH just hit a pivotal level that could have marked the end of the downtrend. The bad news: at least thus far, the price action seems to be rejecting it.

ETH Needs to Climb Above $3,250 to Keep the Rally Going

Looking at the daily chart, we can see that ETH broke above the $3,250 price zone. In previous Ethereum price predictions, we highlighted that this was the key resistance to watch down the road, as a move above would invalidate the token’s bearish structure.

ETH/USD Daily Chart (Coinbase) – Source: TradingView

In addition, this price area is in confluence with the 200-day exponential moving average (EMA), which increases its technical relevance for both short and long-term price predictions.

At first, we got an instant rejection on December 4 ahead of the FOMC meeting. However, the price bounced back on Tuesday and broke through the $3,250 resistance. However, we can see some early signs of rejection in the form of big upper wicks.

The selling pressure seems to have accelerated as ETH hit $3,400 on Wednesday, right after Powell’s speech. Today’s liquidations confirm that the market is dumping the token as it hits this critical mark.

The Relative Strength Index (RSI) is also at a critical juncture, as it stands at 52. If the rally continues, we could get a move toward $4,000 in the next few weeks, and possibly before the year ends, as a bullish structure would be confirmed.

Nonetheless, if a rejection is confirmed in lower time frames, we could see ETH retreating to $2,800 shortly.

Early Bounce in Hourly Chart Favors a Bullish Outlook for Ethereum

Heading to a lower time frame, we can see that the same fractal repeats on the hourly chart. The price has come back down to retest the market’s bullish structure by tagging the uptrend’s previous high.

ETH/USD Hourly Chart (Coinbase) – Source: TradingView

The Relative Strength Index (RSI) just hit some extreme lows in this LTF below 30, indicating that the sell-off got out of hand. Now, this momentum oscillator seems ready to make a comeback after climbing above the 14-period moving average.

If it rises past the mid-line, a bullish outlook would be confirmed, and that could result in a strong recovery toward the 3,400s. Volumes also confirm the rebound as they climbed above average levels.

All things considered, these are early signals that the post-FOMC dump is over and that ETH could be getting really for a serious rally now.