Ethereum Drops Below $3,370 as CPI and Fed Pressure Spark Dollar Rally
ETH-USD breaks key technical support after sticky inflation prints and reduced Fed cut odds drive risk-off sentiment | That's TradingNEWS
Ethereum (ETH-USD) Slides Below $3,370 as CPI-Fueled Dollar Rally Pressures Risk Appetite
Ethereum's recent rejection from the $3,560 resistance confirms a bearish shift amid a resurgent dollar. As of Wednesday, ETH-USD is trading around $3,365, down over 5.8% from last week's high, mirroring the macro-driven selloff seen across crypto and tech. U.S. CPI data at 2.7% YoY and sticky core CPI at 2.9% have pushed Treasury yields higher, driving dollar strength and weakening risk sentiment. ETH is now breaking short-term support levels, risking further downside unless macro pressure eases.
CPI Impact and Fed’s Hawkish Hold Keep ETH Bulls Caged
With the Fed now expected to cut just 43bps by December, down from 50+ earlier in the week, Ethereum is losing macro momentum. Fed speakers, including Logan and Collins, emphasized an "actively patient" stance in response to tariff-driven inflation risks. As a result, 10-year Treasury yields spiked to 4.23%, and the U.S. Dollar Index hit 98.55 before slightly retracing. The knock-on effect: a de-risking rotation out of crypto, pressuring ETH/USD.
Technical Breakdown: ETH Breaches Rising Channel and 50 EMA
Ethereum is now trading decisively below its rising channel support that held since early July. The breakdown accelerated after ETH lost the 50-day EMA at $3,432, with RSI (14) falling to 38.6, entering bearish territory. Immediate support lies at $3,290, followed by a stronger floor at $3,154. On the upside, resistance is forming at $3,430, and bulls must reclaim that to signal a reversal. Momentum remains skewed lower unless ETH regains its 50 EMA with conviction.
Whale Outflows and ETF Slowdown Reinforce Caution
On-chain flows show whale wallets have reduced accumulation, with a net outflow of 17,000 ETH over the last 72 hours. Ethereum spot ETF inflows have also tapered off, down 22% week-over-week, reflecting institutional hesitation amid macro turbulence. This trend compounds technical weakness and suggests near-term pressure unless broader risk appetite returns.
Layer 2 Usage and Staking Growth Offer Long-Term Support
Despite short-term volatility, ETH fundamentals remain robust. Layer 2 activity across Arbitrum and Optimism is surging, with daily transactions averaging 3.4 million. Staked ETH continues to climb, now over 32.6 million ETH, locking supply and supporting the long-term bullish case. But until macro conditions stabilize, these metrics are unlikely to provide immediate price floor support.
Verdict: Cautious Hold on ETH-USD With $3,154 as Key Line in the Sand
Ethereum's price action has shifted decisively bearish following CPI data and Fed recalibration. With the dollar rising, whale outflows increasing, and ETF flows slowing, ETH faces mounting headwinds. A sustained break below $3,290 opens a fast move toward $3,154, which must hold to avoid a steeper correction. While long-term structure remains intact, short-term bias is neutral-to-bearish. Verdict: Hold, with potential to buy closer to $3,150 if macro pressure abates.
