Ethereum declined below $2,200 on Friday, sliding nearly 3% as investors digested persistently high US inflation data and renewed concerns over potential interest rate hikes from the Federal Reserve.
US inflation data and Fed outlook
September’s Personal Consumption Expenditures Price Index, which the Federal Reserve closely monitors, rose 0.5% month-over-month and 3.6% compared to the previous year. Core PCE, a measure that excludes the volatile food and energy segments, increased 0.3% on the month and 3.1% year-over-year, aligning with analysts’ expectations.
Market participants responded to the report by increasing bets that the Federal Reserve could implement another rate hike before the year ends. CME FedWatch data indicated an 80% probability of an increase at the Fed’s December policy meeting.
This shift in sentiment followed the Federal Reserve’s decision earlier in the week to leave interest rates unchanged at 3.75% to 4%, even as most officials continued to voice concerns that inflation remains above target levels.
Investors face ongoing uncertainty as the prospect of restrictive monetary policy continues, despite the October pause in rate hikes.
Futures market shows ongoing sell-side pressure
Data from blockchain analytics firm CryptoQuant showed persistent selling pressure in the Ethereum Binance perpetual futures market. The 30-day moving average of ETH Net Taker Volume fell to roughly negative $166.6 million on October 16, its lowest level in four months, before recovering to negative $117.3 million several days later.
This indicator measures the difference between aggressive buy and sell orders in the derivatives market. Its continued negative reading indicates that sellers remain dominant, although the imbalance has narrowed recently.
Despite this, funding rates for Ethereum perpetual futures held in positive territory, meaning traders with long positions continued to pay shorts. This reflects ongoing demand for leveraged bullish exposure even as the overall market trend remains subdued.
Open interest has stabilized at around 12.7 million ETH throughout October, following declines in September. This suggests that the total number of outstanding Ethereum futures contracts has steadied.
Spot Ethereum ETFs in the US recorded $21.4 million of net outflows on Wednesday, with another $105.48 million withdrawn on Thursday. This marked the fourth consecutive session of outflows, implying muted demand among institutional buyers.
| Metric | Value | Trend |
|---|---|---|
| ETH price | Below $2,200 | Falling |
| ETF outflows (Wed) | $21.4 million | Rising |
| ETF outflows (Thu) | $105.48 million | Rising |
| ETH Net Taker Volume (Oct 16) | −$166.6 million | 4-month low |
| Liquidations (24h) | $360.5 million | High |
Forced liquidations in ETH derivatives markets increased sharply, totaling $360.5 million over the previous 24 hours. Long positions accounted for $305 million, or nearly 85% of total liquidations, indicating that most losses occurred among traders who expected a rebound.
Additional selling pressure emerged after hackers siphoned approximately $6 billion from Binance, the world’s largest cryptocurrency exchange by trading volume.
Mini dictionary: CryptoQuant is an on-chain data analytics platform that provides insights into cryptocurrency market activity, including metrics for spot and derivatives trading.
Technical outlook and key support levels
Ethereum’s daily chart maintains a bearish tone, with price trading below its 20-day, 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs). Currently, the 200-day EMA near $2,310 represents the first significant resistance that bulls need to surpass. Additional resistance levels lie at $2,355 and $2,360—aligned with the 100-day EMA—and at $2,409 and $2,443, corresponding to the 20-day and 50-day EMAs.
Support has been established near $2,200, which briefly broke down before ETH quickly rebounded above it. If this zone fails to hold on a daily close, the market could shift focus toward lower levels at $2,107, $1,972, and $1,854.
The Relative Strength Index for Ethereum has dropped to 29, falling beneath the commonly referenced oversold threshold of 30, while the Stochastic Oscillator gives a reading of 14, placing it firmly in oversold territory. These conditions suggest that selling pressure is stretched, but do not yet confirm the start of a reversal.
Recovery would require ETH to maintain support at $2,205 and reclaim the 200-day EMA to build any evidence of stabilization. Until these signals emerge, persistent negative futures flows and ETF redemptions support a cautious outlook for Ethereum.
