Ethereum posts 1% gain after Fed hold; Coinbase Premium remains negative

Ethereum price today: Can ETH hold $2,350?

• Ethereum inches past $2,350, supported by the Fed's decision to keep interest rates steady at 3.75-4.00%.
• Persistent US selling weighs on sentiment as the Coinbase Premium Index falls to its weakest reading since February.
• Following a rebound from the 200-day EMA, ETH is challenging resistance at $2,355.

A modest recovery takes Ethereum (ETH) just above $2,350 on Wednesday, following the Federal Reserve's (Fed) decision to leave interest rates unchanged.

Can ETH extend its modest gains after the Fed's rate hold?

With a 10-2 vote, the Federal Open Market Committee (FOMC) kept rates at 3.75-4.00%. It pointed to strong growth in economic activity despite heightened geopolitical uncertainty. Inflation remains elevated, the Committee noted, adding that incoming data would guide its assessment of the policy stance needed to return inflation to its 2% target. September's 25-basis-point rate hike preceded this decision.

Attention in the markets has now turned to Thursday's Personal Consumption Expenditures (PCE) report, which provides the Fed's preferred measure of inflation.

Despite the decision being largely priced in, ETH initially responded with a 1% rise to above $2,350. The CME FedWatch tool had put the probability of the Fed's move at over 90%.

Will risk-averse US sentiment keep ETH under pressure?

Beyond the immediate response to the Fed, selling by US investors continues to weigh on ETH.

Monday saw the Coinbase Premium Index drop to -0.181, its weakest reading since February, before a modest recovery to -0.142 on Tuesday. The index tracks the difference in ETH prices between Coinbase Pro and Binance. It has stayed below zero since early September, signalling that selling pressure from US-based investors remains stronger than in other regions.

Outflows also persisted across US spot ETH exchange-traded funds (ETFs). According to SoSoValue data, Tuesday marked their second successive day of net withdrawals, totalling $60.2 million. Should the withdrawals persist, ETH ETFs may post their worst month since their July 2024 launch.

Ethereum technical outlook: Can ETH clear $2,355 after rebounding from the 200-day EMA?

Coinglass data puts Ethereum liquidations over the past 24 hours at $43.1 million, with short positions accounting for the largest share at $36 million.

After finding support at the 200-day Exponential Moving Average (EMA) of $2,316, the leading altcoin has rebounded to test resistance at $2,355. The nearby 100-day EMA at $2,362 reinforces this barrier. A break higher would bring the $2,411 horizontal level into focus, ahead of the 20-day and 50-day EMAs at $2,424 and $2,450, respectively. ETH must overcome these levels before confronting the key resistance at $2,548.

If prices retreat, the 200-day EMA remains the immediate support, followed by further cushions at $2,256, $2,204, and $2,107.

After the Stochastic reached oversold territory, it and the Relative Strength Index (RSI) recovered from their declines to 33 and 39, respectively.