Ethereum $ETH price movement is mainly positively correlated with the Fed's rate cuts; rate cuts usually drive its price to pump, but in special scenarios like recessionary rate cuts, this correlation can weaken or even reverse. The specific relationship is as follows:

1. Conventional rate cuts drive price movement: The Fed's rate cuts increase market liquidity, reduce borrowing costs for banks and corporate financing, and funds that would originally be directed towards low-yield assets like bonds will shift towards high-return risk assets like Ethereum. At the same time, rate cuts are likely to weaken the dollar, and since Ethereum is priced in dollars, it will be seen as a tool for hedging against the decline in fiat purchasing power, attracting capital inflows. For example, when rate cut expectations intensified in August 2025, Ethereum's monthly rise exceeded 15%, and after the probability of a rate cut surged to over 80% in December, Ethereum received capital inflows and showed upward momentum, with the market also expecting it to rebound to $3400.

2. Recessionary interest rate cuts may lower prices: If interest rate cuts are implemented due to a severe economic recession, panic sentiment may spread in the market, and investors will prioritize safe-haven assets like gold and short-term government bonds, resulting in the selling off of risk assets like Ethereum. In this case, the Fed's interest rate cuts would no longer be beneficial, but would instead lead to a sell-off of overall risk assets, causing the price of Ethereum to decline.

3. Interest rate cut expectations affect short-term volatility: Before the interest rate cut is implemented, changes in expectations can influence the price of Ether in advance. For example, on August 23, 2025, when data showed that the probability of a rate cut in September rose to 82%, Ether increased by 6.3% in a single day. After the Fed's probability of a December rate cut soared from 30% to over 80% in November, institutions and whales rushed to increase their holdings of Ether, stabilizing its price above $2900. Conversely, if the expectations for a rate cut suddenly cool down, its price will also quickly adjust downward in response to changes in market sentiment. #十二月降息预测