Ethereum declined to $2,309 on Thursday after briefly rising to $2,350, following the Federal Reserve’s decision to maintain its benchmark interest rate between 3.75% and 4.00%.
Fed holds rates steady amid persistent inflation concerns
The Federal Open Market Committee voted 10 to 2 in favor of holding rates steady, after a 25-basis-point increase in September. Committee officials characterized economic activity as continuing at a solid pace, though they highlighted ongoing geopolitical uncertainty and stated that inflation remains at an elevated level.
Members said incoming data would determine future monetary policy as the Fed seeks to return inflation closer to its 2% target. Market participants had widely expected the outcome, with CME FedWatch data indicating more than a 90% probability that rates would remain unchanged.
Initially, Ethereum gained approximately 1% in response to the central bank’s announcement, but soon reversed, falling by 2.1% over the past 24 hours.
Officials emphasized that the decision to keep rates steady reflected a cautious approach, as “inflation remains elevated” and new data will be crucial in determining the timing of future changes.
Investors are now closely watching the upcoming Personal Consumption Expenditures inflation report scheduled for Thursday, as its results could influence the Fed’s next policy steps.
US investor demand shows weakness as Coinbase premium turns negative
Recent data provided by blockchain analytics firm CryptoQuant pointed to subdued demand from US investors. Ethereum’s Coinbase Premium Index reached -0.181 on Monday, marking its lowest point since February, before recovering to -0.142 on Tuesday.
This index measures the price difference between ETH traded on Coinbase, often used by US investors, and Binance, a major global exchange. When the reading is negative, ETH trades at a discount on Coinbase, suggesting weaker US buying or stronger selling pressure.
The index has remained below zero since early September, highlighting persistent challenges for optimistic momentum.
US spot Ethereum exchange-traded funds recorded net outflows of $60.2 million on Tuesday, followed by another $21.41 million withdrawal on Wednesday, as tracked by SoSoValue. This marked the third straight session of investor redemptions, extending a trend that could make October the largest outflow month since these ETFs launched in July 2024.
These persistent outflows stand in contrast to Ethereum’s earlier price rebound, indicating that institutional demand, especially via ETFs, remains under pressure.
Mini dictionary: Coinbase Premium Index — A metric that compares cryptocurrency prices on Coinbase and Binance. Negative values typically signal weaker demand or higher selling pressure from US-based investors compared with global traders.
| Date | Coinbase Premium Index | US Spot ETH ETF Net Outflow ($) |
|---|---|---|
| Monday | -0.181 | N/A |
| Tuesday | -0.142 | 60.2 million |
| Wednesday | N/A | 21.41 million |
Technical analysis: ETH falls below key moving averages
On the daily chart, ETH/USD slipped below its 200-day Exponential Moving Average, which was near $2,316, and is currently trading at $2,309. The latest downturn comes after Ethereum failed to clear the 100-day EMA at $2,362 midweek.
A recovery above both the 200-day and 100-day EMAs would be needed to shift the short-term outlook positive and bring $2,411 into play. Additional resistance levels lie at the 20-day EMA near $2,424 and the 50-day EMA around $2,450. Surpassing these would increase the likelihood of a rally toward $2,548.
Key support can be found at $2,287, which served as last week’s low, followed by $2,256, $2,204, and $2,107.
Ethereum’s Relative Strength Index recovered to 35, while the Stochastic Oscillator climbed to 33 after reaching oversold levels. The RSI remains below 50, reinforcing a bearish trend.
Data from CoinGlass indicated $81.5 million in total ETH liquidations over the past 24 hours, with $41 million of that involving short positions, placing additional pressure on bearish traders during price fluctuations.
Maintaining support at $2,287 and overcoming the resistance area between $2,355 and $2,362 represents the critical test for Ethereum bulls in the current environment.
Traders are watching whether ETH can hold key support or will face further selling if bearish pressure persists.
