The price of Ethereum surpassed $1,845, increasing by 0.4% following the Federal Reserve's decision to pause interest rates.
On-chain and derivatives data indicate a resurgence of bullish momentum. The rise in Ethereum's price coincided with the announcement made by the US Federal Reserve on May 7, and the open interest in $ETH has exceeded $21 billion, suggesting potential for further gains after Vitalik's recent proposal for a network update.
ETH Holds Above $1,845 After Fed Rate Pause Spurs Risk Asset Rally
Ethereum (ETH) demonstrated an upward trend after the recent monetary policy announcement from the Federal Reserve.
On May 7, ETH increased by 0.4%, surpassing the $1,845 resistance level, supported by market optimism following the FOMC's decision to maintain interest rates at 4.25%–4.50%.
Despite the Federal Reserve's recognition of increased economic uncertainty, its choice to decelerate the reduction of its balance sheet was interpreted by investors as a dovish stance.
This development enhanced risk-taking sentiment across various markets, especially for assets such as ETH. As U.S.
Treasury yields fell, the price of $ETH surpassed the intraday resistance level of $1,845—an optimistic technical indicator amid rising interest in decentralized assets.
On-chain analytics have also validated a decrease in selling pressure, as Ethereum's Age Consumed and exchange outflow statistics reflect investor confidence following the FOMC meeting.
If macroeconomic sentiment remains consistent, ETH seems likely to aim for the $1,950 resistance level, which was last observed in mid-March.
This short-term outlook is additionally reinforced by robust derivatives data and sustained developer engagement.
Vitalik’s Upgrade Proposal Adds Momentum to ETH Bullish Thesis
Vitalik Buterin, the co-founder of Ethereum, presented a framework for the forthcoming significant upgrade of Ethereum just prior to the Federal Reserve's decision.
The proposal emphasizes statelessness and enhanced node efficiency, with the objective of optimizing the protocol's scalability and decentralization in the long run.
Notable enhancements include improved witness compression, optimization of state storage, and a modular execution architecture.
The timing of Vitalik's announcement seems deliberate, considering the increasing regulatory scrutiny and the competition from Layer 2 chains that are capturing ETH's market share.
By addressing scalability while maintaining decentralization, the anticipated modifications could bolster investor confidence, particularly following Ethereum's relatively lackluster performance compared to rivals such as Solana in early 2025.
Market participants reacted positively to the news, viewing it as a sign of Ethereum's potential for long-term growth.
Derivatives Data Confirms Trader Confidence in Ethereum’s Breakout Potential
The derivatives market presents a similarly optimistic outlook for Ethereum, as significant indicators demonstrate a resurgence in investor interest.
In the past 24 hours, Ethereum Open Interest increased by 2.65% to reach $21.35 billion, indicating an influx of $400 million in new investments in $ETH futures.
Furthermore, data from Coinglass reveals that options volume surged by 40.34% to $594.76 million, while Options Open Interest grew by 4.84% to $4.19 billion.
The significant increases indicate that speculators are anticipating greater volatility and directional shifts in the near future.
The long/short ratio for Binance ETH/USDT was recorded at 2.1486, while OKX ETH traders exhibited an even more optimistic ratio of 2.26, indicating that more than twice as many accounts are holding long positions compared to short ones.
Among the leading traders on Binance, the long/short position ratio reached 2.8153. Liquidation data further corroborates this bullish sentiment.
Over the last 12 hours, losses from ETH shorts amounted to $6.07 million, in contrast to $14.33 million in long liquidations.
Although there is a higher exposure to long positions, data on short liquidations reveals that traders who were incorrectly positioned for additional declines are being eliminated.
The consistent upward trend in both futures and options interest implies that Ethereum's next price movement could potentially test the $1,950 and $2,050 levels, provided that macroeconomic momentum and development updates remain favorable.
Ethereum price forecast today: ETH eyes $1,938 breakout amid Bollinger Band squeeze
Ethereum's price movement remains stable above $1,800, indicating the possibility of a forthcoming upward breakout.
The existing candlestick pattern shows a narrowing range within the Bollinger Bands, implying a volatility squeeze that often precedes a significant directional shift.
The upper Bollinger Band is positioned at $1,938, serving as a short-term resistance level and price target if bullish momentum continues.
Today's forecast for Ethereum's price is moderately optimistic, dependent on an increase in volume and confirmation of direction.
The Directional Movement Index (DMI) reinforces this perspective, as the blue DI+ line has recently crossed above the orange DI, which is a traditional bullish indicator suggesting a shift in short-term momentum favoring buyers.
However, the ADX, while experiencing a slight increase, remains below 20, indicating that the trend has not yet been firmly established.
To confirm a bullish bias, a daily close above $1,850 accompanied by increased volume would be necessary to validate the setup.
On the other hand, a decline below the middle Bollinger Band at $1,762 would alter the short-term bias to bearish, potentially pulling ETH back towards $1,700.
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