Ethereum (ETH) is trading above $2,400, up 3% on the day, as positive sentiment from a fragile Israel-Iran ceasefire and robust institutional demand for Ethereum ETFs overshadow the Federal Reserve’s cautious stance on interest rates. The cryptocurrency’s resilience comes despite Fed Chair Jerome Powell’s “watch-and-wait” approach, which has left markets uncertain about the timing of future rate cuts.
Key Drivers Behind Ethereum’s Recent Performance
• Geopolitical Relief: The announcement of a ceasefire between Israel and Iran has eased global risk aversion, boosting investor confidence across financial markets, including crypto. This development has helped Ethereum recover from recent lows and maintain its upward momentum.
• ETF Inflows: US spot Ethereum ETFs recorded $100 million in net inflows on Monday, pushing cumulative inflows above $4 billion. This surge in institutional interest highlights growing confidence in Ethereum’s long-term prospects, even as Grayscale’s ETHE product saw outflows due to its higher fee structure.
• Fed Policy Uncertainty: Powell’s testimony before Congress emphasized the Fed’s cautious approach, citing potential inflationary pressures from new tariffs. Despite this, Ethereum’s price action suggests that crypto markets are more sensitive to geopolitical developments and institutional flows than to central bank rhetoric.
Technical Outlook: Breaking Resistance, Eyeing Higher Levels
Ethereum has broken above the upper boundary of a descending channel and the 50-day Exponential Moving Average (EMA), signaling a potential shift in market sentiment. The cryptocurrency found strong support near $2,110, reinforced by the 100-day Simple Moving Average (SMA). If ETH can hold above the descending channel’s upper boundary and clear the $2,500 resistance and the 200-day SMA, it could test higher levels within a symmetrical triangle pattern.
However, a rejection near $2,500 could see ETH retrace toward the lower boundary of the triangle. Technical indicators like the Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are approaching neutral levels, with a firm crossover potentially accelerating bullish momentum. A daily close below $2,100 would invalidate the current bullish thesis and could lead to a test of $1,750.
Market Sentiment: A Mix of Optimism and Caution
Analysts note that while institutional demand is robust, overhead resistance remains a challenge. The recent price rise is seen as a market “exhale” after a period of volatility, rather than a definitive breakout. The evolving narrative around trade tariffs and Middle East tensions continues to cloud risk sentiment, making short-term moves highly data-sensitive and technical.
