Ethereum Price Forecast: US PCE inflation strengthens December rate hike expectations as ETH falls

$2,250: Ethereum price today

• $2,300 gave way for Ethereum on Thursday. The drop followed a rise in US PCE inflation.
• Short-term positioning in Ethereum derivatives remains tilted towards the bearish side as prices retreat.
• Failure to reclaim the 200-day EMA could send ETH down to $2,107.

4.8% was Ethereum's (ETH) loss on Thursday. The token slipped below $2,300 after US Personal Consumption Expenditure (PCE) inflation rose.

September's PCE Price Index rose 0.5% MoM and 3.6% YoY, 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 release, investors continued to price in an 80% probability of 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 kept interest rates steady in a 10-2 vote. Many characterised the decision as a hawkish hold.

ETH derivatives show short-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 indicator tracks the difference between buying and selling volumes among perpetual futures traders executing 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. The reading suggests bearish traders still dominate near-term market sentiment.

Funding rates, however, remain positive. This signals a longer-term upside bias among ETH traders, in contrast with the immediate market mood. Funding rates measure the periodic payments exchanged between long and short perpetual futures traders to keep contract prices aligned with the underlying asset's spot price. When funding is positive, long traders pay short traders to retain their dominance.

After declining in September, open interest has stayed near 12.7M ETH for most of October. The measure represents the total value of outstanding ETH futures contracts.

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

$2,107 downside risk: Ethereum technical outlook

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

The daily chart retains a bearish bias, with ETH trading beneath its 20-, 50-, 100- and 200-day Exponential Moving Averages (EMAs). These averages are grouped between roughly $2,311 and $2,445. Both the 14-day Relative Strength Index (RSI), at 34, and the Stochastic, at 8, are in oversold territory. Downward pressure therefore remains dominant, although the selling is beginning to look stretched.

The first upside barriers are horizontal resistance 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, the nearest downside support stands at $2,205, followed by $2,107. A more substantial 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. Know more.)