Ethereum Price Eyes 40% Surge After Morgan Stanley Shifts Fed Rate Forecast

Ethereum price breaks $4,500 resistance with strong momentum, supported by bullish technical indicators and growing market interest.

Ethereum is poised for a potential breakout. With Morgan Stanley predicting the Federal Reserve will cut interest rates this year, Ethereum could soar

Historical trends show that when interest rates fall, cryptocurrencies like ETH tend to thrive. As Ethereum price shows strong momentum, technical indicators suggest it could surge by 40%.

Morgan Stanley’s Fed Rate Cut Prediction

Morgan Stanley economists expect the Federal Reserve to cut interest rates three times this year. The forecast follows signs of a softening labor market. Unemployment rose to 4.3% in July

Only 22,000 jobs were added to the economy in the same month. Morgan Stanley believes the Fed will ignore rising inflation. They expect the rate cuts to begin soon and continue into 2026.

This forecast has affected market sentiment. The U.S. dollar index and bond yields have dropped sharply in recent weeks

The ten-year bond yield is now at 4%. The U.S. dollar index has fallen over 10% from its peak. This decline in the dollar has led to a risk-on sentiment. Investors are now more likely to buy cryptocurrencies like ETH.

Ethereum’s Technical Outlook and the 40% Surge Potential

Ethereum price recently crossed the $4,500 mark. This is the highest level since August 28

Technical analysis suggests that ETH may rise another 40%. Ethereum has jumped from $1,370 in April to the current levels. The coin has retested the $4,115 support level several times this year. A breakout above this level could trigger further gains.

Ethereum shows strong upward momentum | Source: TradingviewETH is above its 50-week Exponential Moving Average (EMA). The Awesome Oscillator is also showing positive momentum

These signals point to more upside for Ethereum. The next target could be $6,250. This level aligns with key technical indicators like the Murrey Math Lines. If ETH falls below $3,000, the bullish outlook would be invalidated.

Ethereum Benefits From Altcoin Season and Market Sentiment

ETH is benefiting from the ongoing altcoin season. The Altcoin Season Index has reached 75, showing strong performance from altcoins. ETH is outperforming Bitcoin as investor focus shifts to altcoins. This trend often leads to strong gains for altcoins like ETH.

Ethereum’s widespread adoption supports its growth. Many decentralized applications are built on the Ethereum blockchain. This increases demand for ETH

Ethereum’s strong technical setup, combined with market sentiment, positions it for potential growth. Investors are watching for the next breakout in Ethereum’s price.