TLDR
- Ethereum declined approximately 4% to $2,420 following an oil price surge beyond $105 and rising Treasury yields
- The Producer Price Index increased 0.4% in August, with annual inflation reaching 5.4%, boosting rate hike probabilities
- Polymarket indicates a 62% likelihood of a Federal Reserve rate increase next week
- US-based spot Ethereum ETFs recorded $34.75 million in net inflows on Wednesday amid downward price movement
- ETH is challenging critical support at the 20-day EMA around the $2,400–$2,405 range
Ethereum experienced a nearly 4% decline in the past 24 hours, sliding to approximately $2,420 and placing significant pressure on the $2,400 support threshold. The digital asset had reached an intraday peak of $2,512 earlier on September 10 before bearish momentum took over.
The downturn coincided with a sharp rally in energy markets. Brent crude pushed above the $105 per barrel mark while WTI exceeded $100, fueled by escalating Middle East geopolitical tensions and supply chain concerns. Simultaneously, US 10-year Treasury yields advanced toward the 4.9% level.
Elevated oil prices typically sustain inflationary pressures. This dynamic, coupled with climbing bond yields, prompted investors to rotate away from higher-risk assets such as cryptocurrencies.
Macroeconomic indicators compounded the bearish sentiment. The Producer Price Index for final demand registered a 0.4% monthly increase in August. Year-over-year, PPI inflation accelerated to 5.4% from 4.8%, with energy components advancing 4.2%.
Market analyst Ted Pillows highlighted on X that ETH has been consolidating between $2,450 and $2,550 for several weeks. According to his analysis, Ethereum requires a weekly close above $2,550 to initiate the next upward move.
ETF Demand Stays Positive
Notwithstanding the price weakness, US spot Ethereum ETFs attracted $34.75 million in net inflows on Wednesday. BlackRock’s staking-enabled ETHB product dominated with $22.94 million, while ETHA contributed $9.71 million.
This follows a $24.29 million outflow recorded on September 8 and modest inflows of $2.1 million on September 9. Weekly accumulation has decelerated to $218.4 million after reaching an annual peak of $824 million the previous week.
Market participants are now anticipating stricter monetary policy. Polymarket data reveals a 62% probability of a rate hike during the Fed’s September 15–16 meeting, escalating to a 71% chance by October.
Retail participants sold 307,000 ETH last week, significantly exceeding the 82,000 ETH accumulated by large holders. Ethereum experienced $88 million in liquidations over 24 hours, with long positions accounting for $73.2 million.
Technical Levels to Watch
ETH continues trading above its 20-day, 50-day, 100-day, and 200-day exponential moving averages. The 20-day EMA is positioned near $2,404, establishing the $2,400–$2,405 zone as the crucial support area requiring close monitoring.
A daily close beneath $2,400 would activate the $2,350–$2,360 range as the next downside target. Further deterioration could expose the $2,300 level and subsequently the 50-day EMA near $2,222.
The Relative Strength Index hovers near 59, reflecting positive directional bias but with diminishing momentum. The Chaikin Oscillator has dropped below the zero line, signaling that accumulation pressure has waned following the August breakout.
On the resistance side, immediate barriers exist at $2,545, followed by $2,626 and $2,787. ETH rallied approximately 37% over a 10-day period before the current retracement, peaking at $2,564.
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