Ethereum holds near $2,360 support as markets await FOMC decision

FUNDAMENTAL OVERVIEW

Ethereum came under heavy selling pressure on the previous day as market expectations for the Clarity Act cloture vote weakened ahead of the Senate vote. The vote did not pass, as noted here. With Congress likely to grow even more divided after the midterm elections, there is little chance of comprehensive crypto market structure legislation advancing again this year. This regulatory setback intensified the strain on Ethereum, which briefly touched the crucial $2,360 support level.

Focus now shifts back to the macroeconomic environment, with today's FOMC decision serving as the next major market mover. The market response could be notable if the Fed's decision diverges from current expectations. The consensus forecasts a 25 bps rate increase, with one or two policymakers dissenting and favoring no change. This meeting will also release the latest Summary of Economic Projections (SEP) and Dot Plot.

The Dot Plot will be the primary focus, with the Fed anticipated to signal two more rate hikes, one in 2026 and another in 2027. That would still suggest a less aggressive path than current market pricing, which shows three additional hikes by the end of 2027. Fed Chair Warsh is not expected to offer forward guidance and should instead reiterate the message delivered at Jackson Hole.

A projection of three or more additional hikes would be a hawkish surprise and could add more pressure on Bitcoin. Conversely, if the Fed signals only one or two additional hikes, markets might view the outcome as dovish, potentially boosting Ethereum.

Middle East developments are also likely to stay in focus. Oil prices remain above $100, keeping inflation concerns elevated as disruptions worsen. Oil has been a significant driver of broader market movements recently, so any signs of de-escalation in the Middle East could push oil lower and trigger a dovish repricing. That could eventually provide a positive catalyst for Ethereum.

For now, the macro backdrop remains a headwind and should continue to cap Ethereum's upside. A meaningful shift would likely require either signs of de-escalation in the Middle East or a dovish FOMC outcome, which could set the stage for Ethereum to break out of the monthly range and reach new highs.

ETHEREUM TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, Ethereum pushed above the 2,560 resistance two times but failed to maintain the breakout and eventually fell back to the 2,360 support. Buyers are expected to keep stepping in at this support with defined risk below it, aiming for a break above the resistance. Sellers, on the other hand, will look for a price break below the support to position for a drop toward the major upward trendline around the 2,100 level.

ETHEREUM TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1 hour chart, a minor resistance zone is visible around the 2,460 level. If there is a pullback into this minor resistance, sellers are likely to step in with a defined risk above it, positioning for a drop back into the support and targeting a breakout. Buyers, meanwhile, will seek a break higher to extend the rally into the major resistance.

UPCOMING CATALYSTS

Today brings the FOMC rate decision. Tomorrow, the US Jobless Claims figures are due. Traders will also monitor Middle East developments closely.