Ethereum Surges 300 Points in Six Days: How Far Can the Bulls Go Before the FOMC Meeting?

Ethereum has climbed from $1,741 to around $1,830 over six trading sessions, accumulating gains of over 300 points. However, with the FOMC meeting approaching on July 30 at 2:00 AM (Beijing time), the market stands at a critical crossroads. New Fed Chair Kevin Warsh delivered a strongly hawkish signal in his June debut, with the dot plot showing half of officials supporting a rate hike this year, completely reversing expectations of a rate cut. This article combines the latest market data and macro policy trends to deeply analyze the driving factors and potential risks of Ethereum's short-term moves, while providing traders with a actionable strategic framework.

I. The Force Behind Six Consecutive Green Candles: Rebound or Reversal?

Ethereum's rise from $1,741 in early July to the $1,830 area—a nearly 5% gain—is particularly notable in the current macro environment. From a technical perspective, this rally has broken the downtrend channel that persisted for weeks, with a clear bullish divergence on the daily chart, MACD forming a golden cross below the zero line, and RSI returning from oversold territory to neutral levels.

However, we must recognize that the nature of this rebound is more likely a "technical repair" rather than a "trend reversal."

First, from a capital flow perspective, institutional funds are exiting. In June, Bitcoin spot ETFs saw a record $4.5 billion in outflows, prompting Citigroup to lower its 12-month inflow forecast to zero and slash its Bitcoin price target from $112k to $82k. Ethereum, as an asset highly correlated with Bitcoin, faces similar institutional capital outflow pressure. If ETF funds do not return, the crypto market may struggle to establish a solid bottom.

Second, from a macro perspective, high interest rates are becoming a "tightening noose" for crypto assets. The Fed's current benchmark rate remains in the 3.50%-3.75% range, unchanged for four consecutive meetings. In such a high-rate environment, the opportunity cost of holding non-yielding assets like Ethereum rises significantly. When traditional financial markets can offer risk-free returns above 4%, the appeal of risk assets naturally diminishes.

Finally, from a market sentiment perspective, this rally is more about repairing the earlier oversold conditions. Bitcoin briefly fell below $58k at the end of June, hitting a 21-month low, and Ethereum also experienced a deep pullback. Technical bounces in extremely pessimistic markets often coincide with short covering and short-term speculative capital inflows, rather than conviction-based long-term allocation.

Therefore, our assessment of this six-day rally is: short-term rebound momentum remains, but the medium-term trend has not reversed. The $1,850 level, a key resistance area, will be the critical test of the bulls' strength.

II. FOMC Meeting Preview: The "Hawkish New Normal" in the Warsh Era

At 2:00 AM Beijing time on July 30, the market will welcome the second FOMC meeting under new Fed Chair Kevin Warsh. Unlike the "quarterly super meeting" in June, this meeting will not release a dot plot or economic projections summary. However, changes in the policy statement and press conference rhetoric could still trigger significant market volatility.

1. The "Hawkish Legacy" of the June Meeting

Looking back at the June 18 FOMC meeting, Warsh's debut left a deep impression on the market:

• Historic reduction in the policy statement: The statement was dramatically shortened from the usual 300+ words to about 130 words, completely eliminating all forward guidance, including key phrases like "further adjustment" that previously hinted at a rate-cutting bias. This marks the official end of the Fed's "forward guidance" era, shifting to a fully data-dependent decision-making model.

• Hawkish pivot in the dot plot: Among the 18 officials who submitted forecasts, as many as 9 expected at least one rate hike within 2026 (5 expected two hikes, 1 expected three), while only 1 still expected a rate cut this year. In contrast, the March dot plot had no one predicting a 2026 rate hike, while 7 expected cuts. This 180-degree shift completely reversed market easing expectations.

• Significant upward revision in inflation forecasts: The median 2026 PCE inflation forecast was raised sharply from 2.7% to 3.6%, core PCE from 2.7% to 3.3%, pushing the timeline for inflation returning to the 2% target back to 2028.

• Warsh's own "no forecast" stance: As the first Fed chair in 14 years not to submit a dot plot, Warsh explicitly stated that "the dot plot is not helpful for executing policy" and hinted at possibly adjusting or even abolishing this mechanism. This "de-mystifying" communication strategy, while increasing policy flexibility, also makes market interpretation more difficult.

2. Key Points of the July Meeting

Although this July meeting is not a quarterly meeting and will not release a dot plot, several dimensions deserve close attention:

Key Point 1: Fine-tuning of policy statement wording. The June statement removed all forward guidance, retaining only factual statements like "economic expansion is solid, employment is stable, and inflation is elevated." Will the July statement adjust the wording further? In particular, against the backdrop of the U.S.-Iran peace memorandum and a significant drop in oil prices, will the Fed's characterization of inflation risk soften marginally?

Key Point 2: Warsh's stance on balance sheet reduction. Warsh did not mention balance sheet reduction arrangements at the June meeting, but the market widely expects him to advance balance sheet reduction during his tenure. Warsh has long advocated for "balance sheet reduction first, rate cuts later," believing the current roughly $6.6 trillion balance sheet is a major source of inflation pressure. If the meeting signals an acceleration of balance sheet reduction, it would add additional pressure on market liquidity.

Key Point 3: Assessment of AI's productivity effects. Warsh has established a special task force to evaluate AI's impact on productivity, employment structures, and wages. If he mentions the deflationary effects of AI during the press conference, it could provide some dovish room for imagination.

3. Market Pricing and Expectation Gaps

Currently, the CME FedWatch tool shows the market estimates a >90% probability of maintaining rates unchanged at the July meeting, with an ~83.1% probability of a rate hike within the year. This suggests that hawkish expectations are already fully priced in.

The key question is: Will the actual outcome be more hawkish or more dovish than expected?

From a risk balance perspective, the "expectation gap" is more likely to tilt dovish. Three reasons:

• After the U.S.-Iran peace memorandum, oil prices have fallen from highs, alleviating energy inflation pressure;
• If the June core CPI data comes in below expectations, it would reduce the urgency for a rate hike;
• Although Warsh himself is hawkish, he emphasizes "data dependence" and "policy flexibility" rather than mechanical rate hikes.

If the actual wording at the July meeting is more moderate than market expectations, it could trigger a "sell the rumor, buy the fact" rally. Conversely, if Warsh once again stresses inflation threats and hints at a September rate hike, the crypto market may face a new round of selling pressure.

III. Ethereum Strategy: Finding Certainty Amid Uncertainty

Facing the upcoming FOMC meeting, traders need to establish a clear strategic framework to secure certainty in a highly uncertain environment.

1. Current Position Management

For traders who built long positions at an average price of $1,741, the current floating profit is about 90 points (~5%), placing them in a comfortable zone. A trailing stop-profit strategy is recommended:

• Move the stop-profit level up to $1,800 (above the breakeven line) to ensure this trade does not turn into a loss;
• If the price breaks $1,837, move the stop-profit further up to $1,820 to lock in most of the profit;
• If the price reaches the $1,850 target, consider reducing positions by 50%-70%, and set a trailing stop on the remaining position.

Core principle: Exit once previous highs are broken; do not hesitate. On the eve of an FOMC meeting, no position should be held with a "gambling on data" mindset. The market may grant you luck many times, but one black swan can wipe out your account.

2. Short Position Strategy Layout

If the price rebounds to around $1,837, consider building a short position:

• Entry: $1,837
• Add-on: $1,848 (if price continues to rise, add at a higher level to average down)
• Stop-loss: $1,858 (strict stop-loss; exit immediately if previous high is broken)

Logical basis: The $1,837-$1,850 area is a previous dense trading zone and a level where multiple rebounds have stalled. Against the backdrop of still-absorbed hawkish FOMC expectations, the probability of this area forming a local top is relatively high. However, it must be clear: if the price effectively breaks above $1,858 (i.e., previous high), it means bullish momentum is stronger than expected, and the short position must unconditionally stop out.

3. Scenario Analysis After the FOMC Meeting

Scenario A: More Hawkish than Expected (30% probability)

• Statement language is tough, hinting at a September rate hike;
• Market reaction: USD surges, risk assets plunge;
• Ethereum could quickly fall back to the $1,750-$1,780 range;
• Response: Hold shorts, stop out longs, primarily wait and see.

Scenario B: In Line with Expectations (50% probability)

• Rates unchanged, language neutral-hawkish;
• Market reaction: Short-term volatility then return to original trend;
• Ethereum may oscillate in the $1,800-$1,850 range;
• Response: Trade range-bound, strictly control position size.

Scenario C: More Dovish than Expected (20% probability)

• Language softens, implying no rate hike or even a cut this year;
• Market reaction: USD falls, risk assets rebound;
• Ethereum may break above $1,850, testing $1,900-$1,950;
• Response: Stop out shorts; be cautious with new longs; wait for a pullback confirmation.

IV. Beyond Trading: Reflecting on the Essence of Investment Amid Legendary Farewells

In the past two days, Neymar and Cristiano Ronaldo have bid farewell to their eras. As legendary players who accompanied us through much of our youth, their departures evoke a sense that brilliance eventually fades, but spirit endures.

Isn't the investment market the same? Every bull market has its legends and mythical stories, but the market shows no mercy to anyone. Neymar's dazzling dribbles on the pitch and Ronaldo's lethal headers in the box are the results of countless training repetitions. Consistent profitability in trading, likewise, does not rely on one or two "divine moves," but on strict discipline, a clear system, and continuous review.

One can be lucky countless times, but one mistake could bring everything back to zero overnight. This sentence deserves to be engraved in the mind of every trader. During high-volatility windows like FOMC meetings, the smartest move is not to predict where the market will go, but to prepare response plans for various scenarios in advance and then execute them strictly.

V. Conclusion: Stick to Principles, Surprise with Tactics, and Wait for Blossoms

Ethereum's six-day consecutive green rally has given the bulls a moment to breathe, but it is far from a time to rest easy. The July 30 FOMC meeting will be the key node determining the short-term direction.

From a longer-term perspective, the crypto market is undergoing a structural transformation: the flow of institutional capital, the refinement of regulatory frameworks, and the restructuring of Fed monetary policy are reshaping the market's operational logic. Bitwise CIO Matt Hougan has predicted that Bitcoin's four-year halving cycle "has ended," and 2026 will be a "year of rise," but the rise will be "steady and sustained" rather than "explosive surges."

For Ethereum traders, the most important thing right now is: protect existing profits, control potential losses, and remain clear-headed and disciplined amid the uncertainty of the FOMC meeting. Whether dove or hawk, the market will eventually give its answer. All we can do is prepare thoroughly before the answer is revealed.

Risk Disclaimer: This article is solely a market analysis and strategy sharing, and does not constitute any investment advice. The cryptocurrency market is highly volatile; investing involves risks, and entering the market requires caution. Please make independent judgments based on your own risk tolerance.

#GT二季度销毁257万枚 $ETH