Ethereum (ETH) Price Under Pressure as Crude Oil Surges Past $105 and Fed Rate Hike Odds Reach 62%

Ethereum declined approximately 4% to the $2,420 level following crude oil’s rally beyond $105 and rising Treasury yields

August PPI data showed a 0.4% monthly increase, with annual inflation reaching 5.4%, boosting rate hike probabilities

Prediction markets indicate a 62% likelihood of a Federal Reserve rate increase next week

US-based spot Ethereum ETFs attracted $34.75 million in net capital on Wednesday amid declining prices

Ethereum is now testing critical support at its 20-day EMA, positioned around $2,400–$2,405

Ethereum experienced a decline of nearly 4% throughout the last 24-hour period, settling around the $2,420 mark and threatening the crucial $2,400 support threshold. The digital asset reached an intraday peak of $2,512 on September 10 before bearish momentum took over.

The downward movement coincided with a substantial rally in energy markets. Brent crude broke above the $105 per barrel threshold while WTI crossed $100, propelled by escalating Middle East geopolitical tensions and supply disruption 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 yields, prompted investors to reduce exposure to risk-sensitive assets including cryptocurrencies.

Economic data reinforced the bearish sentiment. The Producer Price Index measuring final demand increased 0.4% during August. Year-over-year, PPI inflation accelerated to 5.4% from the previous 4.8% reading, with energy costs contributing a 4.2% gain.

Market analyst Ted Pillows highlighted on X that Ethereum has been consolidating within a $2,450 to $2,550 corridor for several weeks. According to his assessment, ETH requires a weekly closing price above $2,550 to trigger the next upward movement.

ETF Demand Remains Constructive

Notwithstanding the price weakness, US spot Ethereum exchange-traded funds registered $34.75 million in net positive flows on Wednesday. BlackRock’s staking-enabled ETHB product dominated with $22.94 million, while ETHA contributed an additional $9.71 million.

This follows a $24.29 million withdrawal on September 8 and modest $2.1 million inflows on September 9. Weekly accumulation has moderated to $218.4 million after achieving a yearly peak of $824 million during the previous week.

Financial markets are increasingly anticipating tighter monetary conditions. Polymarket data reveals a 62% probability for a rate increase at the Fed’s September 15–16 policy meeting, escalating to a 71% likelihood by October.

Retail participants offloaded 307,000 ETH during the past week, substantially exceeding the 82,000 ETH accumulated by whale addresses. Ethereum experienced $88 million in forced liquidations over 24 hours, with long positions accounting for $73.2 million of that total.

Critical Technical Levels in Focus

Ethereum 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 primary support area under observation.

A confirmed daily close beneath $2,400 would activate the $2,350–$2,360 range as the next downside target. Further weakness could expose the $2,300 level and subsequently the 50-day EMA positioned near $2,222.

The Relative Strength Index currently registers near 59, suggesting a marginally bullish bias though momentum is decelerating. The Chaikin Oscillator has crossed below the zero line, signaling diminished accumulation pressure following August’s breakout rally.

For upside scenarios, initial resistance appears at $2,545, followed by $2,626 and $2,787. Ethereum posted approximately 37% gains over a 10-day stretch before the current correction, achieving a cycle high of $2,564.