Recovery from FVG, news flow supports push toward 4.55–4.65

Aug 26

Hello everyone, looking at the H4 chart we can see that the recent sharp drop in ETH stopped exactly at the FVG support zone of 4.30–4.36, leaving a long lower wick. From this base, price quickly rebounded to the lower edge of the Kumo and has now re-entered the cloud — a signal that selling pressure has been absorbed. The rebound also came with higher volume compared to previous pullback candles, reinforcing the possibility of recovery. On the upside, the two stacked supply FVGs at 4.55–4.65 and 4.65–4.75 are the “natural targets” for a move to retest supply.

News angle: Tailwinds for ETH

• Fed rate cut expectations: After Jackson Hole, markets significantly raised the probability of a 25bps Fed cut as soon as September, with major banks (like Morgan Stanley) also shifting their forecasts. Lower rates mean broader liquidity, which benefits risk assets such as ETH.
  
  
• ETF/ETP inflows: According to CoinShares, this month Ether is leading inflows into digital investment products, reversing the trend against Bitcoin. This is a sign that market sentiment is leaning towards ETH.
  
  
• Improved ETF liquidity: The SEC has approved the in-kind creation/redemption mechanism for crypto ETFs, allowing more efficient issuance and redemption of shares, improving tracking — a positive factor for institutional demand.
  
  
• Pectra upgrade: The mainnet has been live since May 2025, enhancing performance and wallet experience, continuing to strengthen Ethereum’s long-term narrative.
  
  
• Short-term noise remains: Last week still saw some outflows from ETPs and profit-taking sales from whales, so rebounds may be choppy rather than smooth.
  

Connecting to technicals
With the Kumo reclaimed, the 4.30–4.36 FVG still serves as a strong support base, and the news backdrop leans positive. I favor a single scenario for the next 1–3 sessions: ETH continues moving higher, first approaching 4.50 and then filling the 4.55–4.65 FVG. This outlook only weakens if an H4 candle closes below 4.30 (breaking the cloud and slicing through support).

What’s your view on the chances of EUR/USD “breaking out of the cloud” in the coming sessions?

Aug 27

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