Ethereum is facing an important test after soaring to $4,800 and then sharply dropping due to global market momentum loss. The Dow Jones slipped from record highs, Bitcoin fell below $111,000, and the dollar strengthened - all putting pressure on cryptocurrency sentiment.
At the same time, signals regarding the potential rate cut next month from Federal Reserve Chair Jerome Powell have led speculators to expect that liquidity may return and push ETH prices higher. The current question is whether Ethereum can hold the $4,000 support level or whether broader market pressure will force a deeper correction.
Ethereum Price Prediction: Stocks Decline After Dow Jones Hits Record High
The U.S. stock market started the new week on a less than favorable note. The Dow Jones index fell 0.8% after reaching a record high on Friday, while the S&P 500 and Nasdaq also recorded slight declines.
This drop occurred despite the remaining optimism about the Federal Reserve possibly cutting interest rates as soon as next month. Nvidia's upcoming earnings report and Powell's optimistic signals remain key catalysts driving investor sentiment across stocks, tech, and cryptocurrencies.
Cryptocurrency stocks like Coinbase and MicroStrategy also fell alongside Bitcoin, which dropped from $117,000 to $110,200. The correlation is very clear: risky assets continue to fluctuate as a group, with cryptocurrencies following stocks as market tensions return.
Ethereum Price Prediction: Decline From Local High
On the daily ETH/USD chart, Ethereum's price recently tested the upper Bollinger Band near $4,800 but then fell sharply, trading around $4,396. This rejection aligns with the overall market weakness and profit-taking after several weeks of continuous growth.
Key technical signals:
The Bollinger Bands indicate that prices are cooling off from overbought levels, with $ETH slipping back to the middle band support near $4,385.
The pivot resistance (R3) around $4,800 has caused strong selling pressure, preventing breakout attempts.
Current price action shows accumulation between $4,200 (support level) and $4,600 (resistance level). A complete breakdown below $4,200 could open up opportunities to retest the psychological support level of $4,000.
Macroeconomic Perspective: Fed Policy and the Strength of the USD
The yield on the 10-year Treasury bond rose slightly to 4.28%, while the dollar index increased by 0.7% to 98.43. Both of these developments are short-term obstacles for cryptocurrencies. Higher yields make riskier assets less attractive, while a stronger dollar puts pressure on dollar-denominated assets like ETH.
However, Powell's hints about the upcoming rate cuts still preserve the mid-term bullish trend. Lower interest rates reduce the opportunity cost of holding cryptocurrencies, improve liquidity, and historically serve as a catalyst for Ethereum and Bitcoin.
Ethereum's Outlook: Can the Bulls Sustain the $4,000 Level?
In the coming weeks, ETH prices may fluctuate according to macro sentiment. If Nvidia's earnings impress and Powell reaffirms his dovish stance in September, ETH could reclaim the resistance area of $4,600–$4,800. Breaking through $4,800 could pave the way for a rally to $5,200.
On the other hand, failing to hold the $4,200 level will increase the risk of ETH sliding back to $4,000. This level coincides with the R1 pivot area and will serve as a crucial battleground for the bulls.
ETH Is Likely to Consolidate Before the Next Price Surge
In the short term, Ethereum's price may struggle to maintain upward momentum as the stock market cools and the dollar strengthens. However, as long as the $4,000 level is held, the overall uptrend remains intact.
The Fed's likelihood of cutting rates next month, along with improved stock market sentiment, could be the catalyst for the next significant rally in ETH prices.
The possible path for Ethereum: consolidating between $4,200 and $4,600 over the next two weeks, followed by an attempt to break towards $5,000 if macro conditions are favorable.
