Bright outlook for crypto market pushes ETHUSD higher

The Federal Reserve’s (Fed) December meeting and the long-awaited 25-basis-point rate cut gave a boost to cryptocurrencies, including Ethereum. Huge capital inflows from institutional investors and positive market sentiment suggest that the uptrend will persist in the short term.

The Fed’s decision to lower borrowing costs to the 3.50–3.75% range and soften its tone signals further monetary easing. Risky assets, such as ETH, thrive under such circumstances, with reduced interest rates and increased market liquidity.

A weaker US dollar and hopes for a potential resumption of quantitative easing (QE) programs create a favorable environment for capital inflows into cryptos. 

Traders seem confident about ETH's future growth, given the rising open interest in futures and the strong bullish bias in the long-to-short position ratio on major exchanges like Binance and OKX. Large holders, known as whales, also accumulate Ethereum, confirming this trend.

Market sentiment for the crypto is predominantly bullish, with a noticeable influx of institutional investment, partly through new staking ETF products. Token volumes continue to decline, hovering near record lows (around 8.7% of the total supply), which exacerbates the deficit and drives up prices.

If current macroeconomic conditions and investor optimism remain unchanged, Ethereum is likely to test and break through the $3,300 resistance level, with an ultimate target of $3,560.

The overall recommendation is to buy ETHUSD upon breaching $3,300. Profits should be taken at the level of $3,560. Stop Loss could be set at $3,100.

The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.