Key Takeaways
- Ethereum declined approximately 4% to roughly $2,420 following crude oil’s climb beyond $105 and rising Treasury yields
- The Producer Price Index advanced 0.4% in August, with annual inflation reaching 5.4%, boosting rate increase probabilities
- Polymarket data indicates a 62% likelihood of a Federal Reserve rate hike during next week’s meeting
- Despite downward price movement, US spot Ethereum ETFs attracted $34.75 million in net inflows on Wednesday
- Ethereum is currently testing critical support near the 20-day EMA at approximately $2,400–$2,405
Ethereum has declined nearly 4% in the last 24-hour period, trading around $2,420 and placing significant pressure on the $2,400 support threshold. The digital asset reached an intraday peak of $2,512 on September 10 before bearish momentum took over.
The downturn occurred alongside a substantial rally in oil markets. Brent crude broke above $105 per barrel while WTI crossed the $100 mark, fueled by escalating Middle East geopolitical tensions and energy supply uncertainties. Concurrently, US 10-year Treasury yields advanced toward the 4.9% level.
Elevated oil prices typically contribute to persistent inflationary pressures. This development, coupled with increasing bond yields, prompted investors to retreat from risk-on assets including cryptocurrencies.
Economic indicators compounded the bearish sentiment. The Producer Price Index for final demand increased 0.4% during August. Year-over-year PPI inflation accelerated to 5.4% from the previous 4.8%, with energy components advancing 4.2%.
Market analyst Ted Pillows highlighted on X that ETH has been consolidating within the $2,450 to $2,550 corridor for several weeks. According to his analysis, Ethereum requires a weekly closing price above $2,550 to initiate the next upward movement.
ETF Inflows Remain Constructive
Notwithstanding the price decline, US spot Ethereum exchange-traded funds registered $34.75 million in net positive flows on Wednesday. BlackRock’s staking-enabled ETHB attracted the largest share with $22.94 million, while ETHA captured $9.71 million.
This represents a recovery from the $24.29 million outflow recorded on September 8 and the modest $2.1 million inflow on September 9. Weekly accumulation has moderated to $218.4 million following the previous week’s yearly peak of $824 million.
Financial markets are increasingly anticipating more restrictive monetary policy. Polymarket predictions reveal a 62% probability for a rate hike during the Fed’s September 15–16 gathering, with odds rising to 71% for an increase by October.
Retail market participants offloaded 307,000 ETH during the past week, significantly exceeding the 82,000 ETH acquired by large holders. Ethereum experienced $88 million in forced liquidations over 24 hours, with long positions accounting for $73.2 million.
Critical Technical Thresholds
ETH continues trading above its 20-day, 50-day, 100-day, and 200-day exponential moving averages. The 20-day EMA is positioned near $2,404, establishing the $2,400–$2,405 zone as the crucial support region to monitor.
A daily candle close beneath $2,400 would activate the $2,350–$2,360 range as the next target. Further weakness could expose the $2,300 level, followed by the 50-day EMA positioned near $2,222.
The Relative Strength Index hovers near 59, reflecting positive momentum that appears to be moderating. The Chaikin Oscillator has declined below the zero line, signaling diminished buying pressure since the breakout witnessed in August.
Regarding upside potential, initial resistance emerges at $2,545, followed by $2,626 and $2,787. Ethereum rallied approximately 37% over a 10-day span before the current retracement, achieving a peak of $2,564.
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