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Highlights
- Ethereum price could soon surge by over 40% amid Federal Reserve interest rate cuts hopes.
- Morgan Stanley economists expect the bank to cut rates three times this year.
- Cryptocurrencies and other risky assets thrive when the Fed is cutting interest rates.
Ethereum price is rising today, crossing the important resistance level at $4,500 for the first time since August 28. Technical analysis points to more gains, potentially 40%, after Morgan Stanley predicted that the Fed would deliver more cuts this year.
Ethereum Price to Jump After Morgan Stanley Fed Cut Forecast
Economists at Morgan Stanley believe that Jerome Powell and his colleagues at the Federal Reserve will restart interest rate cuts next week. These analysts see the bank delivering two more cuts in the final meetings of the year.
The case of cutting rates is based on the fact that the labor market is softening, with the unemployment rate rising to 4.3% in July and the economy adding just 22,000 jobs. A separate report on annual revision showed that the economy had fewer than 900,000 people on payrolls than expected.
Morgan Stanley analysts expect that the bank will ignore the fact that US consumer inflation remains elevated and is moving away from the Fed target of 2.0%. They also predict that the bank will accelerate its cuts in 2026 after Donald Trump replaces Jerome Powell as the chair.
The ongoing hopes explain why the US dollar index (DXY) and bond yields have plunged in the past few weeks. Data shows that the ten-year bond yield has plunged to 4% and formed a death cross on the daily chart. Similarly, the US dollar index has fallen by over 10% from the year-to-date high of $110.
Ethereum price will likely benefit from Fed cuts as investors embrace a risk-on sentiment as they did during the pandemic when most coins surged.
Further, the coin will benefit from the emerging altcoin season, with data showing that the Altcoin Season Index has jumped to 75, a sign that these coins are doing better than Bitcoin.
ETH Price Chart Analysis Shows a 40% Surge is Possible
Technical analysis shows that the value of ETH could surge soon. It has jumped from a low of $1,370 in April and is now hovering close to the all-time high.
The coin recently retested the important support level at $4,115, where it struggled to move above three times since last year. A break-and-retest pattern is a continuation pattern.
Ethereum is above the 50-week Exponential Moving Average, while the Awesome Oscillator continues to rally, a sign of high momentum.
Therefore, the potential ETH price prediction for 2025 is where it rallies to the important price at $6,250, which is notable as it coincides with the extreme overshoot of the Murrey Math Lines.
On the other hand, a drop below the support at $3,000 will cancel the bullish forecast and point to more downside.
Frequently Asked Questions (FAQs)
1. Will Ethereum price continue to rally this year?
2. How do Fed cuts impact Ethereum and cryptocurrency prices?
3. Is Ethereum a good investment?
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