Will These Gains Hold in May?
Ethereum price has done well in the past few days as investors bought the dip following a weak performance in April. The ETH token is trading at $2,935, which is the highest it has been since April 29th. It has risen by more than 8% above the lowest level in April, bringing its total market capitalisation to more than $355 billion.
Ethereum price performance mirrored that of Bitcoin and American equities. Bitcoin crossed the important resistance level at $40,000 for the first time in more than a week. At the same time, the Dow Jones and the Nasdaq 100 indices rose by almost 3%, which is a spectacular performance. In the past few months, there has been a close correlation between American equities and major cryptocurrencies like Bitcoin and Ethereum.
The ETH price comeback after the hawkish Federal Reserve is mostly because investors had already priced in the decision by the Federal Reserve. Everyone expected it to hike rates by 0.50% and hint at more hikes. Besides, Powell and other officials have made the case for more tightening in the past few weeks. This explains why the coins suffered a spectacular meltdown recently.
The question now is whether Ethereum can continue flourishing in a period of high-interest rates. While the coin tends to perform in such a period, it is possible to do well. For one, it is hard to trust a Fed that long-proclaimed that inflation was transitory.
Therefore, there is a likelihood that the bank will not hike as much as it has said recently. However, a situation where Ethereum and other coins rise in anticipation of a dovish Fed can’t be ruled out.
Ethereum price prediction
The four-hour chart shows that the Ethereum price has been in a strong comeback in the past few days. Before the recovery, the coin had formed a falling wedge pattern that is shown in purple. Now, the 25-day and 50-day moving averages have made a bullish crossover pattern while the RSI is approaching the overbought level.
Therefore, the ETH token will likely keep rising as bulls target the key resistance level at $3,200 in May this year. A drop below the support at $2,850 will invalidate the bullish view.
