Ethereum Price Forecast: ETH retreats as US PCE inflation bolsters the case for a December rate hike

Ethereum trades at $2,250 today

• A rise in US PCE inflation preceded Ethereum's retreat below $2,300 on Thursday.
• A near-term bearish bias in Ethereum derivatives accompanies the price decline.
• Failure to reclaim the 200-day EMA could leave ETH facing a fall to $2,107.

An increase in US Personal Consumption Expenditure (PCE) inflation was followed by a 4.8% fall in Ethereum (ETH) on Thursday, taking the price below $2,300.

September's PCE Price Index rose 0.5% month on month and 3.6% year on year, in line with market forecasts. Excluding volatile food and energy prices, core PCE advanced 0.3% on a monthly basis and 3.1% annually, also matching expectations.

Following the inflation figures, investors continued to assign an 80% probability to a rate increase at the Federal Reserve's (Fed) December meeting, according to the CME FedWatch tool.

At its October meeting on Wednesday, the Fed voted 10-2 to keep interest rates unchanged, a decision widely characterised as a hawkish hold.

ETH derivatives show a near-term bearish bias

Ethereum derivatives were already displaying a short-term bearish bias as the inflation figures arrived.

On Binance, ETH Net Taker Volume remains below zero. This metric tracks the difference between buying and selling volumes among perpetual futures traders placing market orders. Its 30-day moving average reached a four-month low of -166.6M on 16 October before the negative reading narrowed modestly to -117.3M on Wednesday, suggesting that bears still control near-term market sentiment.

Funding rates, however, have stayed positive. In contrast to the immediate market mood, this indicates that traders retain a longer-term upside bias in ETH. Funding rates measure the periodic payments exchanged between long and short positions in perpetual futures, designed to keep the contract price aligned with the underlying asset's spot price. When funding is positive, traders holding long positions pay those holding shorts to maintain their dominance.

Following September's decline, open interest, which represents the total value of outstanding ETH futures contracts, has remained close to 12.7M ETH for much of October.

US spot ETH exchange-traded funds (ETFs) also extended their run of outflows on Wednesday. Net withdrawals totalled $21.4 million, marking the third consecutive day of net outflows.

Ethereum technical outlook: ETH faces risk of a fall to $2,107

Over the past 24 hours, Ethereum liquidations have totalled $224.5 million, with long positions accounting for $187.6 million.

Trading below the 20-, 50-, 100- and 200-day Exponential Moving Averages (EMAs), ETH continues to show a bearish bias on the daily chart. These averages are grouped between roughly $2,311 and $2,445. The 14-day Relative Strength Index (RSI), at 34, and the Stochastic, at 8, are in oversold territory. Together, they suggest that downward pressure still prevails, even as the sell-off begins to appear stretched.

Any rebound would first encounter the horizontal resistance level at $2,355 and the 100-day EMA near $2,360. Above these, the 20- and 50-day EMAs at $2,409 and $2,443 add to a dense supply zone. If ETH cannot reclaim the 200-day EMA at $2,310, immediate downside support lies at $2,205, followed by $2,107. A more pronounced correction driven by sellers would bring the lower support levels of $1,972 and $1,828 into view.

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