Ethereum rebounds to $2,470 after Fed rate hike

Ethereum (ETH) rose nearly 3% in the past 24 hours, reaching $2,470, after the U.S. Federal Reserve implemented its first interest rate increase since 2023. The rally occurred despite hawkish commentary from Federal Reserve Chair Kevin Warsh, defying the typical market reaction to such monetary tightening.

Traders had largely priced in the central bank's decision before the Federal Open Market Committee convened, with the probability of a hike reaching 93% in the days leading up to the meeting. The market continues to anticipate further tightening, with data from FedWatch indicating that the odds of a second rate hike by December remain near 90%.

In the immediate aftermath of Warsh's press conference, ETH rallied from session lows of $2,370. This price action followed a period where net inflows to exchange-traded funds turned negative ahead of the Fed's decision. Investors withdrew $265 million from these vehicles in the days prior to the announcement, a move that kept monthly inflows significantly lower than levels seen in August.

Technical indicators suggest momentum may be shifting in favor of buyers. Trading volumes have surged in recent weeks, bringing the 7-day and 30-day moving averages for this metric closer together. Data from Santiment shows these lines have shortened their distance significantly, potentially triggering a bullish crossover for the first time since July 2025. A similar crossover previously marked the start of a rally that took ETH from $3,300 to $4,750.

On the daily chart, ETH has formed a bull flag pattern following its bounce off $2,400 support. This setup mirrors a consolidation phase from last year's April and May that preceded a new all-time high for the token. If the price breaks past the upper bound of this flag at $2,550, analysts expect the next leg up could begin, targeting at least $3,300 in the coming weeks. The Relative Strength Index currently sits above 55, indicating continued bullish momentum.

Several regulatory and macroeconomic factors have reduced uncertainty for the sector. The failed vote on the Clarity Act, the SEC's commitment to market-specific regulations, and the Fed's renewed dot plot have removed key obstacles that previously hindered further rallies. However, risks remain if the U.S. dollar strengthens beyond expectations due to higher rates. In such a scenario, ETH could retreat to its 200-day exponential moving average before any new rally resumes.