Ethereum is trading around $2,680 on Thursday, holding most of its gains from a rebound triggered by softer-than-expected US inflation data. The Federal Reserve's preferred price gauge, the Personal Consumption Expenditures index, came in below consensus, easing concerns about another rate hike and providing a brief lift to risk assets.
The initial reaction saw ETH climb from a session low of $2,655 to $2,730, a gain of roughly 2.8%, before settling back into a narrow range. Market participants are now weighing whether the positive inflation signal can sustain buying interest or if the cryptocurrency needs further consolidation before attempting a move higher.
Inflation data shifts rate expectations
August's headline PCE showed annual inflation of 3.4%, about 0.3 percentage points below the forecast cited in the report. Core PCE also missed expectations, adding to evidence that price pressures may be cooling. According to the CME FedWatch tool, the probability of a 25-basis-point hike at the next Federal Reserve meeting dropped from 68% to 37%.
That shift reduces the likelihood of a near-term rate increase, though it does not eliminate it. Future inflation and employment reports could still alter the outlook. For Ethereum, a less restrictive monetary policy stance generally supports appetite for riskier assets, and the initial rebound suggests traders welcomed the data.
On-chain metrics turn positive
Santiment's 365-day Market Value to Realized Value indicator has moved above zero for the first time since July 2025. A positive reading implies that the tracked cohort of holders is back to an average unrealized profit, a shift that analysts interpret as improving market conditions after a prolonged weak period. Historical instances where this indicator crossed above zero were followed by Ethereum trading above $4,000, though past performance does not guarantee a repeat.
Additionally, the seven-day moving average of Ethereum trading volume has crossed above its 30-day average, indicating recent activity is strengthening relative to the longer-term baseline. Higher volume can support a price move, but it reflects both buying and selling, so its significance depends on whether the increased activity accompanies sustained gains or renewed distribution.
Key levels and the path to $3,400
The psychological $3,000 level remains a critical hurdle for buyers. A convincing break above it would strengthen the case for a move toward the next target around $3,400. The upcoming Glamsterdam upgrade, scheduled for this quarter, could also draw attention and provide a catalyst.
Despite the positive inflation reaction, Ethereum has been consolidating over the last few hours and could retreat toward $2,500. The daily chart shows a bullish structure, with analysts expecting a rally toward the $3,400 psychological resistance, but that scenario depends on bulls defending key support levels. A failed retest or renewed macroeconomic pressure would weaken the outlook.
For now, Ethereum's rebound improves the immediate picture, while the path toward $3,400 still relies on stabilization and a sustained break above $3,000. Traders are watching whether the recent on-chain improvements translate into lasting demand or if profit-taking resumes.
This article is for informational purposes only and does not constitute financial advice.
