On Wednesday, the Ethereum price witnessed low volatility trading around the $3,300 mark, evidenced by a long-wick neutral candle formation. Initially, the altcoin made an intraday high of $3,350, but its price reverted amid the release of a 25-basis-point rate cut from the Federal Reserve. While the uncertainty may drive ETH for a prolonged correction, the latest on-chain data highlights an intact accumulation trend among institutions and whales.
- Since October, the Ethereum price has witnessed a steep downtrend resonating within the formation of a falling channel pattern.
- Crypto assets failed to gain momentum even after the U.S. Federal Reserve delivered its expected 25 bps rate reduction.
- On-chain data shows that BitMine Immersion Technologies bought another 33,504 ETH for approximately $112 million, shifting its liquidation value to $2,234.
Ethereum Holds $3,300 as Fed Rate Cut Triggers ‘Sell-the-News’ Market Reaction
On December 10th, the crypto market showed a neutral to bearish bias despite the delivery of the highly anticipated 25 basis points rate cut by the Federal Reserve.
Ordinarily, a Fed rate cut is seen as good for risk assets, including cryptocurrencies, because it reduces the cost of borrowing and promotes economic recovery. However, after a notable recovery since last weekend, the monetary policy today caused a typical “sell-the-news” reaction in the majority of major digital assets, including Bitcoin and Ethereum.
As a result, the Ethereum price shows a long-wick neutral candle at $3,300 mark, accentuating overhead supply
On-chain monitoring platforms had two interesting inflows for today’s pullback:
- One of the largest publicly traded mining treasuries, Bitmine received 33,504 ETH ($112 million) from FalconX into cold storage.
- A whale tracked by Lookonchain under the tag of “1011short” added to an existing leveraged long, causing the position to increase to 120,094 ETH, worth $392.5 million, with liquidation at $2,234.
Glassnode’s URPD data reveals the new single densest concentration of realized cost basis to be $2,772 – $2,775, where 4.44 million ETH (3.7% of total supply) were bought near the previous cycle peak. That narrow band has turned from overhead supply to the heaviest cluster of on-chain support evident in the whole distribution.
Ethereum Price To Wait Key Support Test Before Next Leap
Over the past three weeks, the Ethereum price showed a steady recovery from $2,621 to $3,168, with the current trading price registering a gain of 20.68%. Consequently, the assets’ market cap jumped to $3,842 billion.
The daily chart highlights the formation of new higher highs and higher lows, accentuating a renewed recovery momentum in the market. Amidst this rally, the coin price gave a decisive breakout from the resistance trend of a falling channel pattern.
The breakout reflects the buyer’s attempt to escape a two-month-long correction trend and the opportunity to recover lost ground. However, with today’s uncertainty in the market, the concurrence is likely to revert lower and retest the breach trendline as potential support.
If the retest validates sustainability above $3,100, the concurrence could continue its recovery for higher levels. The post-breakup rally could push the price 15% up to challenge $3,666, followed by a lead towards $4,245.
On the contrary, if the coin price falls within the channel pattern, the bullish thesis would get invalidated.
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