Ethereum is hovering near the critical $2,300 support level on Thursday, having given back gains from a brief rally that followed the Federal Reserve's decision to hold its benchmark interest rate steady. The cryptocurrency slipped to around $2,310 after failing to sustain momentum above $2,350, reflecting persistent bearish pressure in the market.
Fed holds rates, but inflation concerns remain
The Federal Open Market Committee voted 10-2 to keep the federal funds rate in the 3.75%-4.00% range, pausing after September's 25-basis-point hike. In its statement, the committee acknowledged that economic activity is expanding at a solid pace despite elevated geopolitical uncertainty, while reiterating that inflation remains above the central bank's 2% target. The Fed indicated that incoming data will guide future policy decisions.
Ethereum initially rose about 1% following the announcement, but the move quickly faded as the decision was widely expected. At press time, ETH is down 2.1% over the past 24 hours, trading near $2,309. According to CME FedWatch, markets had priced in a greater than 90% probability of unchanged rates before the meeting.
Investors now look ahead to Thursday's Personal Consumption Expenditures price index report, which could shape expectations for the Fed's next move.
Weak US demand weighs on ETH
The bearish price action aligns with data suggesting subdued demand from US-based investors. CryptoQuant's Coinbase Premium Index, which compares ETH prices on Coinbase and Binance, fell to -0.181 on Monday, its lowest level since February, before recovering slightly to -0.142 on Tuesday. A negative reading indicates that ETH trades at a discount on Coinbase, often signaling stronger selling pressure or weaker buying interest on that platform.
The index has remained below zero since early September, underscoring the difficulty of sustaining a recovery. Additionally, US spot Ethereum ETFs recorded net outflows of $60.2 million on Tuesday and another $21.41 million on Wednesday, according to SoSoValue. This marks a third consecutive session of withdrawals, and continued redemptions could make October the largest outflow month for these products since their launch in July 2024.
The persistent ETF outflows contrast with Ethereum's recent price rebound, indicating that institutional demand through these vehicles has yet to strengthen.
Technical levels and market signals
On the daily chart, ETH/USD has dropped below its 200-day Exponential Moving Average (EMA) near $2,316, a bearish signal. The cryptocurrency also failed to break above the 100-day EMA at $2,362 on Wednesday. However, a sustained move above both the 200-day and 100-day EMAs in the near term would improve the short-term outlook, potentially bringing $2,411 into focus.
Further resistance lies at the 20-day EMA near $2,424 and the 50-day EMA around $2,450. Clearing that cluster would strengthen the case for an advance toward $2,548. On the downside, the first major support is at $2,287, the previous week's low. Below that, the next levels identified are $2,256, $2,204, and $2,107.
The Relative Strength Index has recovered to 35, while the Stochastic Oscillator rose to 33 after reaching oversold territory. These readings suggest selling pressure has increased, as the RSI remains below the neutral 50 level.
CoinGlass data shows $81.5 million in ETH liquidations over the last 24 hours, including $41 million in short positions. The concentration of short liquidations is consistent with pressure on bearish traders during the rebound.
For buyers, holding $2,287 and overcoming the $2,355-$2,362 resistance zone remain the immediate tests.
This article is for informational purposes only and does not constitute financial advice.
