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Crypto Bounces on Fed Minutes; Ethereum Price Projection

Steve Miley trader
Updated 24 Nov 2022

Riskier assets, including the broader cryptocurrencies and altcoins, staged a solid rally on Wednesday both before and after the release of the Federal Reserve Minutes from their November Meeting, which showed a likely reduced pace in interest rate increases. Ether has sent some positive near-term signals and generated short-term positive price projections.


Fed Minutes Boost Risky Assets and Crypto

The Wednesday release of the Minutes from the last Federal Open Market Committee (FOMC) Meeting earlier in November highlighted, as expected that the majority of members of the Committee are shifting towards a move to less aggressive interest rate hikes going forward than those previously seen in 2022. Even though already priced in by the money markets, the likely shift to a 50bp rate hike at the next meeting on 14th December from the prior 0.75% hikes seen through this year, was welcomed by riskier assets. US and global stock markets advanced, and the major cryptocurrencies also gained as the US dollar was lower across the Forex board.

Ether Rebound

The release of the Fed Minutes helped to boost the broad cryptocurrency altcoins, with market leaders Bitcoin (BTC) and Ether (ETH) pushing notably higher on Wednesday and gain into today. Ether has managed to rebound this week from 1075, from just above the earlier November plunge low at 1073, which was established in the fallout from FTX collapse and contagion. This rejection of a more bearish signal is viewed as a short-term positive, although it should be noted that the overall decline from the 2031 August swing peak and the earlier November plunge leaves an intermediate-term bearish outlook.


Ethereum Price Forecast

The short-term threat is for further gains for ETH/USD to target the swing/ rebound high at 1348. A push through here would complete a short-term Double Bottom and favour further upside through late November and into December.

However, a bigger picture, intermediate-term bullish shift, would still require a better recovery phase to overcome the late October swing peak at 1676.

Failure to get above 1676 into year-end could see bigger bearish forces resume and target a retest of the 1075/1073 lows, and extension down to test chart supports at 1006/997 and the bear market low from June at 880.

Steve has 29 years of financial market experience including 3 years at Credit Suisse and 15 years at Merril Lynch. Steve is the Academic Dean for The London School of Wealth Management and has won many awards from Technical Analyst Magazine.