Ethereum Faces $3,100 Threat as Sell Signals Intensify After FOMC Market Shakeup

Ethereum's price is under pressure after a 7% plunge triggered by the FOMC meeting. With bearish sell signals forming on the charts, ETH could drop to $3,100 unless bulls regain control at key support levels near $3,500.

Ethereum Sell-off Intensifies After FOMC Meeting

After Wednesday's FOMC meeting, the value of Ethereum fell 7% since the Fed hinted at two rate cuts in 2025.

Speculators have interpreted the two rate cuts instead of the four expected, resulting in a bearish interpretation and a selloff. Rate cuts are dovish and promote a market boom.

The decision's impact was seen by both regular markets and crypto markets, therefore the meltdown was not limited to just one. Wednesday saw a loss of 175.48 points, or 2.90%, for the S&P500.

Sell Signals Emerge: Ethereum Risks Falling to $3,100

Coingape points out that the crypto market crisis caused by the FOMC has caused the Ethereum price to construct a double top on the four-hour chart. This technical pattern suggests that the current rally may be coming to an end, and it is a sell signal. Ethereum has reached a new high of $4,111 in 2024, after an 11% increase in December. On the other hand, it has completed the double-top formation at $3,583 after a recent 14% drop.

A successful breakout from the double top formation will be confirmed by a collapse below the $3,656 and $3,539 support levels. Ethereum price could fall 13% to $3,080 if this scenario plays out.

However, the double top pattern could be damaged if the bulls stage a robust recovery and the price bounces off $3,656. If the price of Ethereum can break $4,111 and turn it into a support floor, then this will be possible. If this happens, the sell signal will be nullified and Ethereum's price will continue to rise, hopefully to $5,000, which would be a new all-time high.

Investors Hold onto Ethereum Despite Sell Signals

The amount of Ethereum available on exchanges decreased from 10.80 million on December 16 to 10.61 million as of December 19, according to data from Santiment. Almost 191,000 ETH, or $7 billion, has departed from the centralized platforms, as shown by this decline.

Because investors aren't storing their tokens on exchanges or other "hot wallets" where they can be traded fast in an emergency, a decrease in supply is seen as a bullish sign. So, these investors aren't planning to sell their Ethereum because they're confident in its future success.

Ethereum Price Prediction: Rally to New Highs or Drop to $3,100

If the price of Ethereum is able to break out of the $3,500 to $3,600 support levels and break over $4,000, it may begin a rally that might take it back to the $4,878 ATH. Some Ethereum price predictions even suggest it might reach a new all-time high.

Nevertheless, Ethereum may find it challenging to preserve its status in the event of a Bitcoin crash. Should the $3,500 support level be breached, it might set off yet another double-digit decline to $3,100 or $3,000.