The Ethereum (ETH) price’s post-US Federal Reserve meeting rollercoaster continued on Friday with prices crashing as low as the $3,100 area before covering sharply to just above $3,400.
That leaves the Ethereum price roughly flat over the past 24 hours, per CoinMarketCap, but losses since last week’s peaks just above $4,100 currently stand at around 16.5%.
The Fed rocked sentiment across traditional financial and crypto markets on Wednesday after they sounded the alarm about sticky inflation and revised their guidance for easing in 2025 to just two rate cuts from the four they had previously signaled.
US equity marketed, which were arguably due a correction following their impressive run to new record levels since Trump’s election victory last month, were hammered at the time.
It’s no surprise then that a risk appetite-sensitive asset like Ethereum (ETH), and cryptos more broadly, also took a beating.
However, price action on Friday in suggests the worse might be over, and a period of stabilization and even a potential recovery into the year end could be on the cards.
The Ethereum price looks on course to form a bullish dragonfly doji daily candle, which tends to form around the time of price bottoms.
ETH also received super strong support as it neared its 200DMA, and there are strong signs that dip buyers are aggressively entering the market to support the price.
Even Trump-affiliated crypto project World Liberty Financial’s wallet was spotted scooping up over $2 million in ETH.
Assuming no further macro surprises hit in the coming weeks (unlikely given an absence of important US data or Fed events), focus should return to bullish themes such as the incoming Trump administration’s pro-crypto policy stance, and how a 2025 should bring a new golden era to crypto.
That means the stage could be set for a gradual recovery for the Ethereum price into the year’s end, assuming the US dollar and US yields stop charging higher.
Calls for new all-time highs before the year’s end may not be realistic, but a gradual recovery in the upcoming sessions back toward $4,000 certainly is.
Ethereum Price – Wen New All-Time Highs?
The Ethereum price’s strong rejection of its latest retest of yearly highs in the $4,100 area has some investors panicking.
But they should relax. Firstly, the major theme in crypto right now is adoption – Wall Street gobbling up supply, talk of a crypto industry boom over the next for years in the US, and potentially even the establishment of Bitcoin national reserves, which would further legitimize the nascent industry.
So yes, maybe the Fed won’t cut as much as hoped next year, which isn’t as good for risk assets like stocks and crypto as if they cut more.
But the adoption tailwinds are set to far outweigh anyway macro headwinds. And macro isn’t even really a headwind anyway – we remain in an environment of a strong US economy at the same time as a Fed that is still inclined to ease rates, which many longer-term minded investors think of as “Goldilocks” for risk assets.
Secondly, ETH’s historic cyclical relationship with BTC also gives reason for optimism about the medium-term Ethereum price outlook.
In prior cycles (like 2020/21 and 2017), Bitcoin has broken out to new record highs one to two months ahead of ETH.
Bitcoin broke out in mid-November, meaning it’s not been just over one month. That sets the table for a potential January surge for the Ethereum price as it follows Bitcoin’s lead.
FUD relating to ETH’s recent price underperformance versus BTC and its “poor tech” when compared to rivals like Solana or Sui shouldn’t deter investors.
That’s not to say those blockchains won’t perform well, but Ethereum remains far and away the dominant blockchain in DeFi with around 56% of TVL, per DeFi Llama, and has US ETFs plus the backing of BlackRock, one of Wall Street’s biggest players.
One BlackRock executive recent commented that, rather than launching more crypto ETF products, their focus right now is on promoting their existing BTC and ETH ETFs to a wider investor base.
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