Ethereum faces renewed selling pressure as the Federal Reserve prepares to deliver its interest-rate decision on October 28. The price of ETH trades near $2,325 after slipping 12% to 14% in the past month, with institutional investors steadily reducing exposure through exchange-traded fund withdrawals.
ETF Outflows and Fed Decision Weigh on Market Sentiment
Over the weekend, Ethereum briefly dipped below $2,300, showing only a modest recovery afterward. Despite this rebound, ETH remains in a broader downward trend as traders monitor whether the Federal Reserve’s policy announcement and subsequent market guidance could prompt further declines.
QCP Capital, in its October 26 market commentary, labeled $2,150 as the next key support level for Ethereum, with $2,500 identified as major resistance. The report suggested that prevailing market conditions leave Ethereum vulnerable to additional losses.
The selling has pushed ETH beneath significant moving averages. CoinDCX analysts pointed to the 200-day exponential moving average around $2,318 and the October 24 low at $2,280 as crucial thresholds to watch. A break below these levels would likely intensify bearish momentum and bring the $2,150 target into sharper focus.
Recent price declines have triggered a wave of liquidations from leveraged traders, amplifying downward pressure. Meanwhile, QCP observed the fourth straight week of outflows from Ethereum ETFs, with approximately $220.7 million withdrawn in the most recent reporting period.
October ETF outflows have surpassed $1 billion to date, erasing much of the optimism that helped drive Ethereum’s September recovery. This sustained weakness has left ETH underperforming Bitcoin, with QCP reporting the ETH/BTC ratio now near 0.029, pointing to slipping relative strength.
In October, more than $1 billion left Ethereum ETFs, reversing the institutional gains recorded the previous month and leaving ETH especially weak compared to Bitcoin’s performance.
On the macroeconomic front, the Federal Reserve will announce its interest rate decision this Wednesday at 2 p.m. ET, followed by a press conference from Chair Kevin Warsh. A Reuters poll found an overwhelming majority of economists expect the Fed to leave the federal funds target at 3.75% to 4.00%.
However, all 100 economists surveyed anticipate another rate hike in December amid persistent inflation and energy price concerns. Elevated interest rates typically encourage continued flows into yield-bearing assets, which can further sap demand for cryptocurrencies.
With these macroeconomic pressures, Ethereum has struggled to regain a foothold above $2,500. The upcoming Fed decision precedes significant U.S. inflation and GDP data set for release on October 29, which market participants believe could further influence monetary policy expectations.
Key Technical Levels and Short-Term Recovery Potential
According to CoinDCX’s latest analysis, buyers would need to recapture $2,362 to signal an initial trend reversal. Sustained movement above $2,400 could bring the $2,450 to $2,500 resistance zone back into focus, but analysts caution that a broader rebound requires stronger momentum and more decisive institutional inflows.
A confirmed break below $2,280 may accelerate losses toward QCP Capital’s $2,150 downside target. RoboForex has identified $2,100 as an even lower support in the event of further selling.
The technical picture is further complicated by Ethereum’s recent Glamsterdam testing delay, which has fueled uncertainty, although it is not directly linked to the asset’s October decline.
Meanwhile, Citi has maintained a 12-month Ethereum price forecast of $3,028, though analysts note that a near-term recovery would require a significant improvement in market sentiment.
Long-term optimism from certain market commentators, including Tom Lee, remains in stark contrast to the recent wave of institutional selling. Active monitoring of support and resistance levels, along with timing and trends in investor activity, stay at the forefront for traders navigating the turbulent environment.
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