Ethereum Price Forecast: ETH continues to attract capital despite impending rate hike and Clarity Act failure

Ethereum price today: $2,400

• Ethereum has seen continued capital inflows over the past few days, despite odds of a 25 bps rate hike in the next Fed meeting reaching 92%.
• However, near-term selling pressure has pushed prices to $2,400 after the Clarity Act failed to progress in the Senate.
• ETH could drop to the 50-day EMA if it fails to recover the $2,431 support level.

Ethereum (ETH) declined to $2,400 on Tuesday after the Clarity Act failed to progress in the Senate. Despite that and the market's near certainty of an interest rate hike at the next Federal Reserve (Fed) meeting, the top altcoin has continued to attract fresh capital.

ETH whales and institutional investors show strength

Ethereum buyers have been dominating sellers over the past few days. Exchange Netflow data shows withdrawals from exchanges have outpaced deposits over the past five days, pushing exchange reserves down by 159K ETH during the period.

Declining exchange reserves suggest investors are moving funds to private wallets, reducing the amount of coins available for immediate selling.

Most of the buying pressure has potentially stemmed from wallets with a balance of 10K-100K ETH, otherwise known as whales. Over the past week, these wallets added roughly 200K ETH to their collective balance.

In contrast, retail wallets, with a balance of 100-1K and 1K-10K ETH, distributed roughly 192K ETH, extending their selling trend, which has been consistent since the beginning of the year.

On the institutional side, US spot ETH exchange-traded funds (ETFs) recorded a second consecutive day of net inflow on Monday, pulling in $121 million, according to SoSoValue data. On Friday, the products pulled in $216.4 million despite BTC ETFs recording outflows.

The consistent buying strength comes amid strong expectations of a rate hike in the upcoming Federal Open Market Committee (FOMC) meeting on Thursday. Investors are anticipating a 25-basis-point rate increase, with odds at 92.3% at the time of writing, according to the CME FedWatch tool.

In addition, the crypto market's CLARITY Act has failed to advance in the Senate after failing to secure the 60 votes needed to invoke cloture. The move has sparked immediate selling pressure in the crypto market, with ETH declining 5% toward $2,400.

Ethereum technical outlook: ETH could drop to 50-day EMA

Ethereum has seen about $220 million in liquidations over the past 24 hours, driven by $194 million in long liquidations, according to Coinglass data.

On the daily chart, ETH has slipped below initial supports at the 20-day Exponential Moving Average (EMA) and $2,431 level. Although it holds above the 200-, 100- and 50-day EMAs clustered between roughly $2,153 and $2,270, keeping the broader bias constructive despite the recent pullback from the highs.

Momentum has cooled, with the 14-day Relative Strength Index (RSI) hovering near a neutral 51 and the Stochastic slipping into the oversold region, suggesting buyers are pausing rather than abandoning the uptrend as price consolidates just under the short-term 20-day EMA at $2,435.

On the downside, if ETH fails to recover $2,431, it could find support at the 50-day EMA around $2,270 and the 200-day EMA at $2,266. Further down is the former resistance-turned-floor at $2,172 and the 100-day EMA near $2,153. A deeper slide would expose $1,961 and then $1,809 as more distant cushions.

On the topside, ETH continues to face pressure at the $2,544 resistance, which it has failed to sustain a daily close above in the recent uptrend. Higher up are the $2,626 and $2,786 hurdles.

(The technical analysis of this story was written with the help of an AI tool. Know more.)