Ethereum slipped 0.7% on Friday as stronger-than-expected pressure from US producer prices weighed on risk assets and revived concerns about tighter Federal Reserve policy. ETH was testing support near $2,431, with its 20-day exponential moving average around $2,405.
The US Producer Price Index for final demand rose 0.4% in August, in line with expectations after July’s figure was revised to a 0.1% increase. On an annual basis, producer-price inflation accelerated to 5.4% from 4.8%. Energy prices were a major contributor, climbing 4.2%, while core producer prices also increased 0.4% during the month.
Rate expectations turn less favorable for crypto
The inflation data arrived ahead of the US consumer-price report and the Federal Reserve’s September 15–16 meeting. Data from Polymarket showed traders assigning a 62% probability to a rate increase at the next meeting, while the estimated chance of a hike by October stood at 71%.
Markets were also increasingly pricing in the possibility that Fed Chair Kevin Warsh would begin his tenure with a rate increase. Higher interest rates can weigh on Ethereum by tightening financial conditions, increasing the appeal of interest-bearing assets and reducing demand for leveraged cryptocurrency positions.
ETF demand remains positive but loses momentum
Institutional demand has provided some support. US spot Ethereum exchange-traded funds recorded $34.75 million in net inflows on Wednesday, reversing the $24 million in outflows reported on Tuesday.
However, weekly inflows have slowed. Ethereum ETFs attracted $218.4 million last week, well below the annual high of $824 million recorded during the previous week. The figures indicate that institutional accumulation remains positive but is no longer accelerating.
On-chain trading data also showed a difference between retail and larger holders. Retail traders sold a combined 307,000 ETH last week, while whales accumulated 82,000 ETH. Continued selling by smaller holders could increase available supply and make it harder for Ethereum to extend its recovery.
Ethereum’s price has also risen faster than futures open interest, suggesting that leveraged traders have been cautious about committing significant new capital to the move.
ETH support is concentrated between $2,223 and $2,256
ETH remains above its 50-, 100- and 200-day exponential moving averages, which are grouped between approximately $2,223 and $2,256. The Relative Strength Index was near 59, maintaining a modestly bullish bias, although the Stochastic Oscillator’s move toward its midpoint pointed to cooling momentum rather than a confirmed bearish reversal.
A rebound would bring initial resistance near $2,545 into focus. A decisive close above that level could open a path toward $2,626 and then $2,787.
Conversely, a sustained break below the $2,405–$2,431 support area would expose the moving-average cluster between $2,223 and $2,256. Further downside levels sit near $2,172, followed by broader trend support at $1,961 and $1,810.
