ETH Holds Above $1,845 After Fed Rate Pause Spurs Risk Asset Rally

Ethereum (ETH) began showing upward momentum following the Federal Reserve's latest monetary policy announcement.

Federal Reserve announced a rate pause on Wednesday, May 7, pushing up Ethereum price above $1,845. The crypto is now showing signs of upward momentum after the FOMC voted to keep interest rates steady at 4.25%–4.50%.

Also Read: Is Ethereum's Price Set For A Breakout After FOMC Minutes Show Economic Uncertainty?

While the Fed noted heightened economic uncertainty and slowed balance sheet reduction, investors viewed this as a dovish tilt, boosting risk-on sentiment across the board—notably on assets like ETH.

As U.S. Treasury yields declined, ETH price pushed through intraday resistance at $1,845—a technical encouragement amid growing demand for decentralized assets.

On-chain data also confirmed reduced selling pressure, signaled by metrics like Ethereum’s Age Consumed and exchange outflow, showcasing investor confidence post-FOMC.

If macro sentiment remains stable, ETH appears poised to target the $1,950 resistance, last seen in mid-March. This short-term trajectory is further supported by strong derivatives data and ongoing developer activity.

Buterin’s Network Update Proposal Aimed at Scalability and Decentralization

Aiming to streamline the protocol’s long-term scalability and decentralization, Vitalik Buterin, co-founder of Ethereum, outlined plans for Ethereum’s next major upgrade just days before the Fed decision.

This proposal, focused on statelessness and improved node efficiency, hopes to address pressing issues like increased gas fees and lagging throughput that have hampered user experience and threatened ETH’s competitiveness in the DeFi landscape.

The suggested changes include better witness compression for efficient transaction handling, state storage optimization to reduce node burdens, and a modular execution design to enhance smart contract efficiency.

Buterin’s timing appears strategic, given the growing regulatory scrutiny on crypto and Layer 2 chains like Optimism and Arbitrum encroaching on ETH’s market share.

By tackling scalability without sacrificing decentralization, the upcoming changes may restore investor conviction, especially after Ethereum’s relative underperformance versus competitors like Solana in early 2025.

Anticipating this, market participants reacted positively to the announcement, viewing it as a bullish signal for Ethereum’s long-term growth prospects.

This optimism is reflected in derivatives data, which shows a surge in activity and liquidity.

Over the last 24 hours, Ethereum Open Interest surged 2.65% to $21.35 billion, signaling $400 million in new capital committed to ETH futures.

Beyond that, Coinglass data shows options volume soared 40.34% to $594.76 million, and Options Open Interest rose 4.84% to $4.19 billion.

These sharp increases suggest speculators are pricing in higher volatility and directional movement ahead. The Binance ETH/USDT long/short ratio stood at 2.1486, while OKX ETH traders showed an even more bullish ratio of 2.26—meaning over twice as many accounts are long versus short. Among top traders on Binance, the long/short position ratio hit 2.8153.

Liquidation data supports this bullish trend. In the past 12 hours, ETH shorts accounted for $6.07 million in losses versus $14.33 million in long liquidations. Despite higher long exposure, short rekt data indicates traders mispositioned for further downside are being flushed out.

The cohesive uptrend in both futures and options interest suggests Ethereum’s next price leg could challenge the $1,950 and $2,050 zones if macro momentum and dev updates stay aligned.