Ethereum Price Forecast: Why is ETH slipping as US PCE inflation strengthens the case for a December rate hike?

Ethereum trades at $2,250 today

• Ethereum slipped below $2,300 on Thursday as US PCE inflation moved higher.
• Short-term bearish positioning in Ethereum derivatives accompanies the price retreat.
• Failure to reclaim the 200-day EMA could leave ETH vulnerable to a fall to $2,107.

Ethereum (ETH) lost 4.8% on Thursday, slipping below $2,300 as higher US Personal Consumption Expenditure (PCE) inflation weighed on the market.

Matching market forecasts, September's PCE Price Index rose 0.5% MoM and 3.6% YoY. Excluding volatile food and energy prices, core PCE advanced 0.3% on a monthly basis and 3.1% annually, also meeting expectations.

Following the inflation data, investors continued to price in an 80% probability of a rate hike 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 steady, a decision widely characterised as a hawkish hold.

Do ETH derivatives point to near-term bearish sentiment?

A short-term bearish tilt in Ethereum derivatives forms the backdrop to the latest inflation figures.

On Binance, ETH Net Taker Volume continues to register negative readings. The indicator 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 narrowing modestly to -117.3M on Wednesday, signalling that bears still control near-term market sentiment.

Funding rates, however, have stayed positive, pointing to a longer-term bullish bias among ETH traders despite the bearish near-term sentiment. These rates represent periodic payments between long and short positions in perpetual futures, helping keep contract prices aligned with the spot price of the underlying asset. When funding is positive, traders holding long positions pay those holding short positions to retain dominance.

Open interest, which represents the total value of outstanding ETH futures contracts, has largely stayed near 12.7M ETH during October following September's decline.

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

Ethereum technical outlook: Could ETH slide to $2,107?

Liquidations in Ethereum totalled $224.5 million over the past 24 hours, with long positions accounting for $187.6 million.

The daily chart remains bearish, with ETH trading beneath the 20-, 50-, 100- and 200-day Exponential Moving Averages (EMAs), grouped roughly between $2,311 and $2,445. Oversold readings of 34 on the 14-day Relative Strength Index (RSI) and 8 on the Stochastic indicate that downside pressure still prevails, although the sell-off is beginning to appear stretched.

Initial upside resistance lies at the $2,355 horizontal barrier and near the 100-day EMA at $2,360. Above these, the 20- and 50-day EMAs at $2,409 and $2,443 add to a concentrated supply zone. Should ETH fail to reclaim its 200-day EMA at $2,310, immediate downside support stands at $2,205, followed by $2,107. A sharper correction driven by sellers would bring the lower support levels of $1,972 and $1,828 into focus.

(An AI tool assisted in preparing this article's technical analysis. Learn more.)