Ethereum Price Prediction: Clarity Act Could Trigger ETH Breakout

Ethereum (ETH) has started the week with a 1.4% jump ahead of Tuesday’s procedural vote on the Clarity Act in the United States.

This key piece of legislation could pave the way for increased adoption of stablecoins and decentralized finance (DeFi) in this key market and could drive substantial transaction volumes to the Ethereum blockchain.

Republicans sent a revised, and final, version of the bill to Democrats to get them on board. This latest draft contains several additions to the existing provisions concerning how elected officials invest and disclose their stakes in different crypto projects and assets.

It also includes protections in case regional banks experience significant withdrawals as a result of the increased adoption of stablecoins as a means of payment and savings.

If this procedural vote is passed, the bill will be sent to the Senate floor for a final decision.

Big Week Ahead for Crypto With Two Macro Catalysts On the Table

Odds on Polymarket regarding the approval of the bill in 2026 have increased from a recent low of 14% to 31% at the time of writing.

In addition to the Clarity Act vote, the Federal Reserve’s Open Market Committee (FOMC) will convene this week for its customary interest rate decision. Nearly 87% of analysts now believe that the Fed will hike rates by 25 basis points to curb inflation in the U.S.

If the Committee decides to delay its decision, that could have a dramatic impact on crypto prices in the near term, although that seems highly unlikely.

That said, the market will scrutinize the words of Chairman Kevin Warsh concerning the Fed’s dot plot and its views on inflation and future interest rate decisions. The odds of another 25bps rate hike in December are quite high at the time, at 74%.

MVRV Ratio Could Soon Send a Massive Buy Signal

Turning to on-chain data, we continue to track the evolution of an on-chain metric called the MVRV Ratio, which tracks the relationship between the aggregated value of all ETH tokens in circulation at the price at which they were bought and their total market value.

In the past three years, whenever this metric moves above the zero line after a strong bear market, that has marked the beginning of ETH’s bullish cycle.

At -5%, we are getting quite close to that buy signal, and we will keep our readers updated on this front. The unexpected passing of the Clarity Act, given that odds on Polymarket indicate that the market does not believe this is possible, could set the stage for a massive rally for ETH and other altcoins.

Hence, this is a critical week for the crypto market, considering the confluence of these two major macro catalysts.

ETH Could Rally to $3,400 If the Chips Fall In the Right Place

Heading to the daily chart, we can see that ETH is retesting the upper bound of a bull flag pattern that we have been tracking for days now.

This is commonly a consolidation pattern that, if broken, could mark the beginning of Ethereum’s next leg up. Our near-term target for the token is $2,800, followed by a much stronger climb to $3,400.

The Relative Strength Index (RSI) is still bullish at 61 and indicates that positive momentum remains quite strong. If the chips fall in the right place, this could be a great week for crypto.