Ethereum (ETH) surged more than 5% in the past 24 hours, climbing above $1,850 after the latest US Consumer Price Index (CPI) report came in below expectations. The data showed annual inflation slowing to 3.5%, versus the 3.8% forecast, while monthly inflation dropped 0.4%—the steepest monthly decline since May 2020. Core CPI, which strips out volatile food and energy prices, eased to 2.6%, beating the anticipated 2.8%.
The softer inflation figures have fueled expectations that the Federal Reserve may adopt a less restrictive monetary policy. Market-implied odds of a rate hike at the July 29 meeting fell to just 8%, according to derivatives data. This shift in sentiment lifted not only cryptocurrencies but also traditional risk assets, with the broader crypto market gaining roughly 2.4%.
Ethereum's sharp rebound caught bearish traders off guard. Data from derivatives markets indicates that approximately $116 million worth of short ETH positions were liquidated over the past 24 hours as prices surged. Open interest—the total value of outstanding futures contracts—rose by about 9% to $26.69 billion, its highest level in over a month, signaling that leveraged traders are returning with a bullish outlook. Funding rates also remained positive, suggesting long-position traders continue to dominate derivatives activity.
Despite the rally, on-chain data reveals caution among both retail and large holders. Wallets holding between 100 and 1,000 ETH, as well as those with 1,000 to 10,000 ETH, reduced their combined balances by approximately 30,000 ETH over the past week. Meanwhile, larger whale wallets (10,000–100,000 ETH) sold roughly 20,000 ETH during the same period. This continued reduction in holdings indicates that many investors are still taking profits or maintaining a defensive posture despite the recent price rebound.
From a technical perspective, Ethereum's 4-hour chart remains constructive. The cryptocurrency is trading above both its 20-day exponential moving average (EMA) at $1,755 and its 50-day EMA at $1,802. However, it remains below the 100-day EMA at $1,948, which continues to act as a key resistance level. The Relative Strength Index (RSI) stands at 67, signaling solid bullish momentum, while the Stochastic Oscillator is near 96, indicating overbought conditions that could slow the pace of the rally.
If buyers maintain control, Ethereum could target $1,909 as the immediate horizontal resistance. A daily close above this level could open the door to higher resistance zones at $2,018, $2,107, and $2,211. On the downside, immediate support lies at the 50-day EMA of $1,802. A decisive break below that could see ETH retest the 20-day EMA at $1,755 and the horizontal support at $1,741, which have recently acted as a strong support zone. If selling pressure intensifies, deeper corrections could expose support around $1,524 and $1,404.
In related market moves, gold retreated from a 2% rally as oil price spikes threaten to undermine the inflation relief, while Asian markets surged on the back of the US inflation data. Meanwhile, XRP holds above $1.10 as bulls eye the $1.17 resistance amid mixed sentiment.
Ethereum has regained bullish momentum following the softer-than-expected US inflation data, with improving derivatives activity supporting the recent rally. However, continued whale selling and weakening US spot demand suggest investors remain cautious.
This article is for informational purposes only and does not constitute financial advice.
