Ethereum Price Forecast: ETH dips as US PCE inflation reinforces December rate hike

Ethereum price today: $2,250

• Ethereum fell below $2,300 on Thursday following an increase in US PCE inflation.
• The decline comes amid short-term bearish leaning in Ethereum derivatives.
• ETH could decline to $2,107 if it fails to recover the 200-day EMA.

Ethereum (ETH) fell below $2,300, down 4.8% on Thursday following a rise in US Personal Consumption Expenditure (PCE) inflation.

The PCE Price Index climbed 0.5% MoM and 3.6% YoY in September, matching market forecasts. Core PCE, which excludes volatile energy and food prices, increased by 0.3% monthly and 3.1% yearly, also in line with expectations.

The inflation reading saw investors maintain an 80% chance of a rate hike at the Federal Reserve's (Fed) December meeting, per the CME FedWatch tool.

The Fed voted 10-2 on Wednesday to leave interest rates unchanged in its October meeting, in what many described as a hawkish hold.

ETH derivatives lean bearish in the short term

The inflation reading comes amid short-term bearish leaning in Ethereum derivatives.

ETH Net Taker Volume on Binance, which measures the difference between buying and selling volume of perpetual futures traders using market orders, remains in negative territory. The 30-day moving average of the metric hit a four-month low of -166.6MonOctober16beforecontractingmodestlyto-117.3M on Wednesday, suggesting bears continue to dominate immediate market sentiment.

Despite that, funding rates have remained positive, indicating traders maintain an upside bias in ETH in the long term, unlike in its immediate market sentiment. The metric measures periodic payments between long and short traders in perpetual futures to keep a contract's price anchored to the underlying spot price of the asset it tracks. In a positive funding regime, long traders pay short traders to maintain dominance.

Meanwhile, open interest, the total worth of outstanding contracts in ETH futures, has hovered around 12.7M ETH for most of October after its decline in September.

Additionally, US spot ETH exchange-traded funds (ETFs) continued their negative streak on Wednesday, with a third consecutive day of net outflow worth $21.4 million.

Ethereum technical outlook: ETH risks decline to $2,107

Ethereum has seen $224.5 million in liquidations over the past 24 hours, driven by $187.6 million in long liquidations.

On the daily chart, ETH is extending a bearish tone as price holds below the 20-, 50-, 100- and 200-day Exponential Moving Averages (EMAs), clustered between roughly $2,311 and $2,445. The 14-day Relative Strength Index (RSI) at 34 and Stochastic at 8 sit in oversold territory, suggesting downside pressure remains dominant even as the sell-off starts to look stretched.

On the topside, immediate resistance appears at the horizontal barrier at $2,355 and the 100-day EMA around $2,360, with the 20- and 50-day EMAs at $2,409 and $2,443 reinforcing a dense supply zone above. On the downside, immediate support is at $2,205 if it fails to recover the 200-day EMA at $2,310. Further support is at $2,107, while deeper floors at $1,972 and $1,828 would come into focus if sellers push ETH into a more pronounced correction.

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