Ethereum The price came under pressure on Monday following the collapse of First Republic Bank (FRC). ETH recovered to a low of $1,827 as investors await the upcoming interest rate decision by the Federal Reserve. It remains about 107% above its 2022 low.
Collapse of First Republic Bank
The biggest financial news on Monday was The collapse of First Republic Bank, the second largest bank to collapse in America. The collapse came a week after the company announced a loss of more than $100 billion in the first quarter. The FDIC said in a statement that the company would be acquired by JP Morgan, America’s largest company.
The collapse of the First Republic makes 2023 the worst year for banks since the 2008 financial crisis. We have seen banks collapse like Signature, Silicon Valley Bank, Credit Suisse and Silvergate Bank.
These pullbacks are positive for Ethereum and other cryptocurrencies prices for two reasons. Firstly, the collapse could mean that many people will turn to cryptocurrencies Bitcoin and ETH. While bitcoin will benefit most from this transition, others altcoins The likes of Ethereum will also benefit as the cryptocurrency has a positive correlation.
Second, the collapse means the Federal Reserve will consider the health of the banking sector when it begins its meeting on Tuesday. Minutes published last month show that many officials were concerned about the banking crisis.
So it is likely that the Fed will consider holding its interest rates at this meeting. The alternative is that the bank will decide to hike rates by 0.25% and then point to strategic pause in the near term.
A change in tune by the Federal Reserve will likely boost Bitcoin and Ethereum prices. Historically, cryptocurrencies have done well when the Fed is pivoting.
Ethereum Price Prediction
The daily chart shows that the price of ETH has been in a bullish trend over the past few weeks. The coin has moved above the 50-day and 25-day exponential moving averages. This is a bullish signal. It has moved above the ascending trend line shown in green.
It has also declined slightly below the key resistance level of $2,032, which was the highest point on August 12 last year. It is at the 23.6% Fibonacci retracement level. Therefore, Ethereum is likely to witness a bullish breakout as buyers target the key resistance point at $2,500.
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