Ethereum price came under pressure on Monday after the collapse of First Republic Bank (FRC). ETH pulled back to a low of $1,827 as investors also waited for the upcoming interest rate decision by the Federal Reserve. It remains about 107% above the lowest level in 2022.
First Republic Bank collapse
The biggest financial news on Monday was the collapse of First Republic Bank, the second-biggest bank to fall in the US. This collapse happened a week after the company announced that it lost over $100 billion in the first quarter. In a statement, FDIC said that the company will be acquired by JP Morgan, the biggest company in the US.
The collapse of First Republic makes 2023 the worst year for banks since the 2008 financial crisis. We have seen banks like Signature, Silicon Valley Bank, Credit Suisse, and Silvergate Bank collapse.
These collapses are positive for Ethereum and other cryptocurrency prices for two reasons. First, the collapse could mean that many people will move to cryptocurrencies like Bitcoin and ETH. While Bitcoin will benefit more in this transition, other altcoins like Ethereum will also benefit since cryptocurrencies have a positive correlation.
Second, the collapse means that the Federal Reserve will likely consider the health of the banking sector when it starts its meeting on Tuesday. Minutes published last month showed that several officials were concerned about the banking crisis.
Therefore, there is a likelihood that the Fed will consider pausing its interest rates in this meeting. The alternative is that the bank will decide to hike rates by 0.25% and then point to a strategic pause in the near term.
A change of tune by the Federal Reserve will be bullish for Bitcoin and Ethereum prices. Historically, cryptocurrencies tend to do well when the Fed is pivoting.
Ethereum price prediction
The daily chart shows that the ETH price has been in a bullish trend in the past few weeks. The coin has moved above the 50-day and 25-day exponential moving averages. This is a bullish sign. It has moved above the ascending trendline shown in green.
It has also moved slightly below the key resistance level at $2,032, which was the highest point on August 12 last year. It is at the 23.6% Fibonacci Retracement level. Therefore, there is a likelihood that Ethereum will have a bullish breakout as buyers target the key…
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