Will Fed Leadership Change Disrupt Ethereum’s 2026 Rally?

Ethereum price has managed to stay above the $3,000 mark, but its momentum is fading. Traders are watching not just the charts but the calendar — specifically, May 2026, when Jerome Powell’s term as Federal Reserve Chair ends. With new leadership expected under a Trump administration, uncertainty is creeping back into global markets. The big question is whether that shift will fuel Ethereum price growth or put a ceiling on its price recovery.

Ethereum Price Prediction: Powell Out, Policy Unclear

The Fed’s latest quarter-point rate cut may look routine, but the timing couldn’t be more significant. Powell’s upcoming exit has markets bracing for a change in tone — and possibly direction. Trump’s rumored nominees, like Kevin Hassett, have openly called for deeper rate cuts, which could push borrowing costs much lower than the Fed currently projects.

But policy shifts don’t happen in a vacuum. The new chair will inherit a split committee, with several members still leaning hawkish. That means 2026 could become a tug of war between political pressure for cheap money and institutional caution against inflation. For Ethereum price, this tug of war matters — because it determines whether liquidity expands or tightens in the broader risk market.

Ethereum Price Prediction Stuck Between Caution and Hope

On the daily chart, ETH/USD trades around $3,115, consolidating after a weak rebound from November’s lows near $2,850. The Bollinger Bands (20,2) show narrowing volatility, similar to XRP’s structure earlier this month. Ethereum price has repeatedly failed to break above the middle band around $3,300, showing hesitation among bulls.

If ETH price loses its footing below $3,000, the next key supports lie at $2,850, $2,600, and $2,400 — zones marked by historical accumulation and Fibonacci retracements. Conversely, a clean break above $3,300 with volume could reignite bullish sentiment, setting up a move toward $3,600–$3,800.

The setup mirrors a market waiting for macro confirmation — and that confirmation will likely come from the Fed, not the blockchain.

Why the Fed Transition Matters for Ethereum Price

Ethereum price thrives when money is cheap and liquidity flows freely. Every major rally — from 2020’s DeFi boom to 2021’s NFT mania — came during aggressive Fed easing cycles. A new Fed chair favoring deeper cuts could inject life into speculative assets again, including crypto.

But uncertainty around leadership transition, delayed economic data due to the government shutdown, and potential legal battles over Fed independence could slow the decision-making process. That translates to hesitation among institutional traders, who now dominate ETH volumes. Until clarity emerges, Ethereum’s price may keep oscillating between optimism and caution.

Ethereum Price Prediction: 2026 Could Start with Confusion, End with Momentum

Expect Ethereum price early 2026 price action to reflect a wait-and-see mood. The market will be reading every speech, nomination leak, and rate projection for hints of how dovish or hawkish the new chair will be. If a Trump-backed Fed leadership moves fast to cut rates, Ethereum could see liquidity-driven gains by mid-2026, potentially retesting $4,000 and beyond.

If not, and the Fed stays divided, Ethereum price may grind lower or remain stuck in a tight range through the first half of the year. Either way, volatility will spike once policy direction becomes clear — and that’s when traders should be ready.

$ETH chart shows stability, not strength. The macro backdrop shows uncertainty, not conviction. Together, they signal a cautious start to 2026. The leadership change at the Fed could either become the spark for ETH price next rally or the anchor that holds it down.