Ethereum Price Rallies 10% on Loosening Fed Policy, Positive Futures Outlook

• The Ethereum price has been trending to the upside over the past week as market sentiment improves.
• This positive sentiment is driven by expectations of an economic recession and the US Federal Reserve (Fed) loosening its monetary policy.
• Positive developments in the futures and options sectors have also been observed, indicating a shift in sentiment for Q1, 2023.

The cryptocurrency market has had a volatile start to 2021, but in the past few weeks, the Ethereum price has been trending to the upside. The second crypto by market capitalization has recorded a 10% profit over the previous week and stands as one of the best performers in the top 10 by market cap.

This positive movement is largely attributed to the improving market sentiment. Reports of an economic recession have caused investors to expect the US Federal Reserve (Fed) to loosen its monetary policy. Currently, the Fed has been hiking interest rates to combat the highest inflation recorded in decades. If conditions deteriorate too much, the market believes the Fed will backtrack, allowing Ethereum and other risk assets to rally. The Fed will be providing light on its next steps today, and if it slows down, the Ethereum price could continue its positive trajectory.

In addition to the macroeconomic conditions, the positive sentiment is also spilling over to other crypto financial sectors. Analysis firm Blofin reported that there have been positive developments in the futures and options sectors, indicating a shift in sentiment for Q1, 2023.

Overall, the Ethereum price is on the upswing, and if macroeconomic conditions and the crypto financial sectors continue to support the rally, the second crypto by market capitalization could extend its gains. Investors will be watching the Fed’s monetary policy decisions today for further insight into the market’s direction.