Ethereum’s price has gone nowhere over the past few days as investors keep an eye on upcoming interest rate decisions by the Federal Reserve. The ETH coin is trading at $2,805, which is slightly below the week’s high of $2,883. Its market cap has fallen to around $340 billion, meaning investors lost more than $160 billion in value recently.
Ethereum April Review
Ethereum had a relatively uneven performance in April. The biggest announcement was that developers were postponing the date of the Ethereum merger from June to the third quarter of this year. Analysts expect the existing network and the Beacon chain to now merge in August or September.
The delay in the merge was disappointing for many. However, many investors believed it was a necessary action because of the importance of the upgrade. Historically, the single era has led to major hacks in blockchain networks such as Ethereum.
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Meanwhile, like other chains, Ethereum saw an outflow of Total Value Locked (TVL) across its network. In the past 30 days, TVL is down by more than 11% to nearly $110 billion. Yet it managed to increase its dominance in the industry to 55% as other chains saw deep declines. Solana and Phantom, for example, lost over 25%.
Ethereum’s price action mirrored that of other assets. In April, the Nasdaq 100 lost more than 18%. Over the same period, US bond yields continued to rise as sell-offs continued. Bond yields have an inverse relationship with prices. In fact, in April the yield curve managed to invert to the lowest level since 2007.
This price action was mostly due to the words of Fed officials. In speeches and statements, officials such as Jerome Powell and Mary Daly indicated that the bank would continue to hike rates. The bank is expected to increase rates by 0.50% and initiate quantitative tightening.
Ethereum Price Prediction
The four-hour chart shows that ETH price has been on a continuous downtrend recently. It has managed to move below the standard pivot point and the 25-day moving average. Also, the relative strength index has moved slightly below the neutral level of 50.
Therefore, I believe the price of Ethereum will drop marginally in the first half of May and then start to bounce back as the Hawkish Fed position has already been settled. Hence, a bounce to $3,200 cannot be ruled out.