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There is a prevailing feeling of risk aversion due to the new reciprocal tariffs imposed by Trump and the hawkish stance adopted by the Federal Reserve.
The price of Ethereum dropped below $3700 at the time of writing this report on Friday, down about 7% so far this week. The decision by the U.S. Federal Reserve regarding the interest rate on Wednesday contributed to this decline.
The U.S. Federal Reserve kept interest rates unchanged at a range of 4.25% - 4.50% for the fifth consecutive time, despite intense pressure from President Donald Trump and his allies to lower borrowing costs.
Closing Ethereum below the main support level
The price of Ethereum fell by about 3% on Thursday, closing below its daily support level of $3730. It is trading at a level below $3700 at the time of writing this report on Friday.
If ETH continues to decline, the drop may extend to the next support at 3500 dollars.
The Relative Strength Index (RSI) on the daily chart has dropped below the overbought level, indicating a decline in bullish momentum. The Moving Average Convergence Divergence (MACD) also showed a bearish crossover on Wednesday, reinforcing the hypothesis of a downturn and the expected downward trend.
On the other hand, if ETH recovers, the advance may extend towards its main psychological level at 4000 dollars.