The U.S. ISM PMI reported 54.5, for the ninth consecutive time above 52, indicating that the U.S. economy is still in an expansionary phase, but at the same time, it also presents greater challenges for the Federal Reserve.

Ethereum is currently around $2,695 and is near the 50-day moving average on the monthly chart.

Strong economic data may not be easy for the Federal Reserve. Higher inflation expectations could complicate the interest rate path, forcing policymakers to weigh between two less than ideal options: keeping interest rates unchanged and waiting, or raising rates at the risk of harming growth.

The United States ISM PMI puts the Federal Reserve in a dilemma

This constitutes a tricky background. If the market believes that inflation will not subside in the short term, keeping interest rates unchanged could push up yields. On the other hand, raising interest rates could drag down economic growth.

Ethereum also has a 56-level that is worth paying attention to.

According to analyst AshCrypto, what is more noteworthy in the crypto market is the level of 56. In 2017, before ISM broke through 56, Ethereum rose from $10 to $1400. From 2020 to 2021, after reaching the same level, Ethereum increased from $88 to $4800.

These historical stages are merely used as a basis for current comparison and do not guarantee that they will repeat themselves in the future.

ISM Will a strengthening trend lead to an even longer encryption cycle?

Therefore, this setting is still not complete at present. If in the coming months ISM continues to rise towards 60, analysis suggests that there may be another major cycle for Ethereum and altcoins between 2027 and 2028.

For now, 54.5 is the figure that stands in front of us. 56 is the next key level to watch, while the Federal Reserve faces greater concerns regarding economic activity and inflation. Ethereum remains around $2695, waiting for further developments from the ISM signal.