Ethereum Faces $2,431 Support Test Amid Inflation Fears

Ethereum is feeling the heat today, trading 0.7 percent lower as traders react to a jump in US producer inflation. Annual producer prices rose to 5.4 percent, a move that has fueled worries about the Federal Reserve tightening its policy. With traders now assigning a 62 percent chance to a rate hike at the next Fed meeting, risk assets like crypto are facing significant pressure.

Despite the recent selling, institutional interest via spot ETFs has provided some relief, even if the pace of accumulation is slowing down compared to earlier weeks. Retail investors appear to be the primary source of the current selling pressure, as smaller holders have been offloading tokens while whales take a more measured approach. This imbalance, combined with hesitant derivatives traders, has created a tough road for a quick recovery.

Technically, Ethereum is currently resting on a key support zone at $2,431 and the 20 day exponential moving average near $2,405. While the broader uptrend remains intact above the 50 day and 200 day averages, the coin needs to break past $2,545 to regain its momentum. If the price fails to hold the current support levels, the market will likely look toward the $2,250 range for the next major floor.