• Ethereum (ETH) is in consolidation mode ahead of a crucial Fed policy announcement.
• The US central bank is expected to lift interest rates by 25 bps and soften its tone on the outlook for further tightening.
• If current money market pricing is to be believed, a dovish pivot from the Fed now looks to be just around the corner.
Ethereum Price Prediction
Ethereum (ETH), the second most valuable cryptocurrency in the world by market capitalization, is currently trading just above $1,800 after seeing a decent bounce from earlier weekly lows in the $1,720s on Tuesday. ETH has seen a 6% increase over the last seven days.
Fed’s Balancing Act Could Impact Ethereum
The US central bank is expected to lift interest rates by another 25 bps, taking the federal funds target range to 4.75-5.0%. However, due to recent collapse of regional US banks and signs that contagion continues to threaten dozens more, it is likely that the Fed will soften its tone on the outlook for further tightening. This could cause Ether prices to drop should markets interpret this as more hawkish than expected; however if it comes across as more dovish then risk-on sentiment could trigger an Ether rally with bulls targeting a 12% increase from current levels.
How High Can Ether Go in 2023?
Recent troubles in banking sectors have marked a key shift in macro narratives driving traditional asset classes and cryptocurrencies which could impact Ether’s outlook for 2023. Money market pricing suggests that a dovish pivot from the Fed looks promising which means easier rather than tighter financial conditions are likely throughout 2023. This could create bullish sentiment favouring crypto assets such as Bitcoin and Ether as investors move funds into “hedges” against weakness in traditional financial markets.
Future Outlook For Ethereum
In addition to these developments surrounding monetary policy decisions and banking sectors, Ethereum also faces competition from other blockchain projects such as Cardano (ADA). Although Ethereum remains one of the most well established smart contract enabled blockchains and continues to capture investor attention with its DeFi products and NFTs (non-fungible tokens) ecosystem; future success depends largely on how well it can navigate these competitive forces while still meeting customer needs effectively going forward into 2023 and beyond.
Conclusion
It appears that overall sentiment towards Ether remains positive but there are several factors influencing price movement both short-term and long-term which need careful consideration before making any investment decisions regarding this digital asset class going forward into 2023.