Ethereum has experienced a notable downturn, dropping nearly 4% in the past 24 hours to around $2,420. This decline has placed the crucial support level at $2,400 under scrutiny. Earlier in the trading session on September 10, ETH reached a high of $2,512 before sellers took control, reflecting the current volatility in the market.
The sell-off coincided with a significant rise in oil prices, with Brent crude surging above $105 a barrel and WTI exceeding $100. These increases are largely attributed to escalating tensions in the Middle East and concerns surrounding energy supplies. Additionally, US 10-year Treasury yields have approached 4.9%, further impacting investor sentiment.
Higher oil prices are typically associated with sustained inflation, which, combined with rising yields, has driven investors away from riskier assets, including cryptocurrencies. Recent macroeconomic data has added to the existing pressure; the Producer Price Index (PPI) rose by 0.4% in August, with annual inflation climbing to 5.4%, up from 4.8%, indicating a notable increase in energy prices by 4.2%.
In the midst of this environment, analyst Ted Pillows remarked on social media that ETH has been fluctuating between $2,450 and $2,550 for several weeks. He indicated that for Ethereum to initiate another upward movement, it must secure a weekly close above the $2,550 mark.
ETF Demand Remains Resilient
Despite the price pressure, US spot Ethereum ETFs recorded $34.75 million in net inflows on Wednesday. BlackRock’s staking-focused ETHB led with an impressive $22.94 million, followed by ETHA with $9.71 million. This positive performance is notable, especially when considering that Bitcoin spot ETFs reported total net outflows of $283 million, marking three consecutive days of losses.
While Ethereum saw a surge in inflows, it follows a $24.29 million outflow on September 8 and only $2.1 million in inflows the day after. Weekly inflows have now declined to $218.4 million, a stark contrast to the yearly high of $824 million recorded the previous week.
Market sentiments are shifting as expectations for tighter monetary policy grow. Data from Polymarket indicates a 62% probability of a Federal Reserve rate hike during its September 15-16 meeting, with a 71% chance of an increase by October. Retail investors have recently distributed 307,000 ETH, significantly outpacing the 82,000 ETH accumulated by whales. Moreover, Ethereum faced $88 million in liquidations within 24 hours, predominantly from long positions.
Technical Levels to Monitor
ETH continues to hover above its 20-day, 50-day, 100-day, and 200-day EMAs, with the 20-day EMA positioned near $2,404, marking the key support area to observe. A daily close below $2,400 could open the doors to the $2,350-$2,360 range, followed by $2,300 and the 50-day EMA near $2,222.
The Relative Strength Index (RSI) sits around 59, suggesting a positive bias but with diminishing momentum. Meanwhile, the Chaikin Oscillator has dipped below zero, signaling a reduction in buying pressure since the breakout in August.
On the resistance side, levels to watch include $2,545, $2,626, and $2,787. Prior to this recent pullback, ETH had gained approximately 37% within ten days, peaking at $2,564. As the market navigates these turbulent waters, all eyes will be on whether Ethereum can maintain its footing above the $2,400 support level.
