Ethereum Price Forecast: ETH risks decline as inflation rises

Ethereum price today: $2,260

• Ethereum trades near $2,260 on Thursday as rising macroeconomic uncertainties weigh on the crypto market.

• ETH futures are showing rising signs of cautiousness among traders, with key sentiment trackers falling into negative territory.

• ETH is testing the support levels at $2,211 and the 50-day EMA.

Ethereum (ETH) trades at $2,260 on Thursday as investors digest the impact of Middle East geopolitical tensions and US macroeconomic releases on the crypto market.

The US Personal Consumption Expenditures (PCE) Price Index rose by 3.5% YoY in March from 2.8%, in line with market expectations. The Federal Reserve's (Fed) preferred inflation gauge, the core PCE — which omits energy and food prices — increased 3.2% YoY, its highest level since November 2023.

An increase in inflation reduces the likelihood of rate cuts, which historically dampens risk-on sentiment in cryptocurrencies. Inflation growth comes amid declining expectations of a rate cut after the Fed's statement on Wednesday showed division among committee members concerning the trajectory of monetary policy.

Combined with persisting Middle East geopolitical tensions, the macro environment is prompting increasing caution among crypto investors.

This is evident in the Ethereum futures market, where the taker buy-sell ratio has fallen into negative territory. The metric measures the difference in trading volume between traders purchasing ETH perpetual contracts with market orders. Its 14-day moving average has been declining since mid-April, falling below its neutral level earlier in the week.

A similar trend is evident in ETH funding rates, which have consistently posted negative values during the period, indicating a dominance of bearish sentiment despite a modest price rise over the past two weeks. Funding rates are periodic payments between traders in perpetual futures markets to keep a contract's price anchored to its underlying spot price.

Open interest has also hovered around 13.5 million ETH after declining from 14.4 million ETH on April 18, signaling lingering cautiousness among traders.

On the spot side, Ethereum's realized price or average onchain cost basis at $2,308 has continued to hold as a key resistance as prices have failed to sustain a rise above it. The move indicates that investors are steadily distributing after breaking even, considering growing macroeconomic uncertainties.

Ethereum Price Forecast: ETH tests $2,211 and 50-day EMA support

Ethereum saw $38.2 million in liquidations over the past 24 hours, led by $19.5 million in short liquidations.

On the daily chart, ETH maintains a mildly bearish near-term bias as price holds below the 20-day Exponential Moving Average (EMA) at $2,287 and the longer-term 100-day EMA near $2,365.

After failing to flip the $2,388 hurdle, the top altcoin has also slipped back below the previously ascending support trend line, now acting as resistance around $2,353, while momentum gauges soften, with the Relative Strength Index (RSI) hovering near the neutral 50 mark and the Stochastic Oscillator (Stoch) lingering in oversold territory. The move hints at weak buying interest on rebounds.

On the downside, immediate support is aligned at the horizontal level near $2,211, with the 50-day EMA at $2,244 providing a nearby demand band ahead of $2,108. A deeper slide would expose $1,909, then $1,741 before more distant floors at $1,524 and $1,405.

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