Tomorrow morning, the Federal Reserve's December FOMC interest rate decision will officially take place. This key meeting, which the market has assigned an 89.4% probability of a 25 basis point rate cut, is becoming a core variable affecting the trend of Ethereum (ETH). Currently, ETH is fluctuating around $3122, with the long/short ratio rising to its highest level since October 2024 at 1.055. Coupled with the improvement in fundamentals after the Fusaka upgrade, the crypto market is at a critical juncture of macro policy and the intrinsic value of assets.
The impact of Federal Reserve interest rate changes on ETH is essentially a threefold transmission of liquidity, risk preference, and asset cost-effectiveness. Historical data has long validated this logic: during the Federal Reserve's violent rate hike cycle in 2022, the price of ETH plummeted from $3600 to $1200, a decline of over 60%; while after the pause in rate hikes in 2023, the expectation of liquidity recovery pushed ETH to rebound to the $2300 range from its lows. The current strong expectation for this rate cut has been pre-released through capital flows—Ethereum ETFs saw cumulative inflows exceeding $300 million in December, with a single-day peak inflow of $72.83 million. Overall, cryptocurrency ETFs have seen cumulative inflows exceeding $1.1 billion, reaching a seven-week high, ending the previous four weeks of continuous outflow, with expectations of liquidity easing becoming an important support for ETH.
More importantly, the rate cut may further amplify ETH's relative investment value. Currently, the staking yield of Ethereum is about 3.2%. As the Federal Reserve's rate cut is implemented and the future rate cut path is clarified, the yields of traditional risk-free assets such as U.S. Treasuries will also decline. According to FalconX's predictions, the yield spread between Ethereum staking returns and U.S. interest rates is expected to turn positive in the next two quarters. This "decline in traditional asset yields + increase in ETH yields" dual effect will significantly enhance ETH's attractiveness to institutional capital. Meanwhile, the recent drop in exchange ETH balances to a new low of 18 million since 2018 has further strengthened the price support logic due to tightening supply.
However, the short-term market still faces the risk of "good news being priced in as bad news." Currently, ETH is in a key consolidation range of $3000-$3240, with a resistance platform formed between $3180-$3240, while support is provided at the psychological levels of $3050 and $3000. If the Federal Reserve cuts rates as expected but the policy statement releases hawkish signals, such as suggesting a slowdown in the rate cut pace for 2026, it may trigger short-term profit-taking, leading to a pullback in ETH testing support levels; however, if the decision clearly indicates a continued easing direction, coupled with the fundamental benefits brought by the Fusaka upgrade, which enhances Layer-2 data capacity by 8 times and reduces transaction costs by 60%, ETH is expected to break through the resistance range and start a new round of increase.
From a long-term perspective, ETH's trend has gradually detached from simple liquidity dependence, shifting towards resonance with fundamentals and the macro environment. After the Fusaka upgrade, the activity of DeFi protocols and DApps continues to improve, accelerating ecosystem expansion; the regulatory environment is also optimizing, with the Federal Reserve incorporating cryptocurrency business into standard processes, Binance obtaining a global license in Abu Dhabi, and the open attitude of traditional asset management giants towards cryptocurrency ETFs bringing in billions of incremental funds. These factors jointly form the basis for ETH's resilience against declines, and even if there are fluctuations influenced by the Federal Reserve's policy wording in the short term, it is unlikely to change the value return logic under the medium-term easing trend.
For investors, the core observation point of tomorrow's decision is not only whether the 25 basis point rate cut will materialize, but also the guidance on the rate cut path for 2026 in the policy statement. One must be cautious of market sensitivity before major events and stay away from community rumors, relying on official information. In the short term, attention can be paid to arbitrage opportunities in the $3050-$3180 range, while in the medium to long term, it is necessary to track Layer-2 ecosystem activity, the sustainability of institutional capital inflows, and the implementation of regulatory policies. Under the dual drive of the Federal Reserve's policy shift and the Ethereum ecosystem upgrade, ETH is standing at a new value anchor, and tomorrow's interest rate decision will become an important catalyst for this value reassessment.
