Ethereum Price Prediction: ETH Bull Flag Faces Rate Hike Risk

Ethereum (ETH) has dropped by nearly 4% in the past 24 hours after the European Central Bank (ECB) hiked interest rates by 25 basis points.

Even though this was a widely expected move, the market is reacting with a sell-off as it occurs in the context of persistent inflation across developed economies and higher oil prices.

Crude prices just jumped above $100 once again, as the United States continues to attack Iran and tensions in the Middle East keep escalating.

"The outlook remains highly uncertain, with risks to the upside for inflation and to the downside for economic growth," highlighted the ECB's Governing Council in a press release published today.

Rate Hike Odds in the U.S. Jump to 74%

In the United States, the odds of a rate hike by the Federal Reserve during the next FOMC meeting have now jumped to 74%, as analysts now expect that the central bank could mimic the move of its European peer.

This is weighing on the short-term performance of crypto assets, including Ethereum (ETH), as it could prompt more severe revisions to the Fed's dot plot.

Data from FedWatch shows that the odds of another 25 basis points rate hike in December have jumped to nearly 60% now. This means a strong upward revision compared to a couple of weeks ago, and it could hit the pause button for Ethereum's latest rally.