Ethereum Drops 2.9% Ahead of Federal Reserve Interest Rate Decision

Ethereum declined 2.9% to trade around $2,400 ahead of an expected 25-basis-point interest rate increase from the Federal Reserve. Over the three weeks leading into the decision, the asset slid roughly 6% from approximately $2,550 as the market-implied odds of a rate hike increased from near 70% to above 90%. By comparison, XRP fell 9.4% on the same day and roughly 25% across the preceding three weeks.

On-chain data indicates that buyer volume has continued to outpace seller volume on the Ethereum network over the past week, suggesting that the recent price drop stems largely from broad market caution rather than asset-specific selling pressure. Year-to-date, Ethereum is down roughly 18%, compared to a 30% decline for XRP under the same macroeconomic rate environment.

This decision marks the first Federal Reserve rate hike since the previous tightening cycle ended in July 2023, during which crypto assets faced sustained downward pressure as capital flowed into Treasury yields. Potential factors that could cushion digital assets include ongoing institutional ETF demand, with regulated crypto funds continuing to maintain significant capital pools.