Ethereum Bounces Back as Inflation Fears Ease, Treasury Yields Plummet
Key Summary
Ethereum reclaimed $2,400 after a brief dip due to hotter-than-expected US producer inflation, with Treasury yields and the dollar retreating to ease inflation pressure. The cryptocurrency's recovery was driven by a decline in US 10-year Treasury yields to 5.095% and the US Dollar Index falling to 102.04.
Ethereum recovered above $2,400 after a brief dip due to hotter-than-expected US producer inflation. Support stands near $2,355, while resistance between $2,496 and $2,552 could challenge the recovery. Ethereum rebounds after producer inflation surprise
Ethereum's Recovery
Ethereum recovered above $2,400 on Friday after a stronger-than-expected US wholesale inflation report briefly pushed the cryptocurrency toward $2,340. September's Producer Price Index increased 1.3% month-over-month and 6.3% annually, exceeding forecasts of 0.5% and 5.3%, respectively. Core PPI, which excludes food and energy prices, also surpassed expectations.
The Backdrop
The figures followed Wednesday's hotter-than-expected Consumer Price Index release, adding to concerns about persistent inflation and the outlook for monetary policy. Ethereum initially declined alongside other risk assets before recovering as Treasury yields and the dollar retreated.
Technical Analysis
The concentration of losses among bullish traders highlights the pressure on leveraged positions during the decline. Forced position closures can intensify selling as falling prices erode traders' collateral. Ethereum's rebound accompanied a decline in US 10-year Treasury yields to 5.095%, their lowest level since September 22. Lower yields helped ease one source of pressure on Ethereum following the earlier inflation-driven rise in borrowing-cost expectations.
Support and Resistance
On the daily chart, Ethereum recovered from the area around its 100-day Exponential Moving Average at $2,356 and horizontal support at $2,355, following its brief dip beneath that zone. Buyers are now attempting to maintain the recovery above $2,411. Momentum indicators show some improvement. The Relative Strength Index edged up to 40.9, while the Stochastic Oscillator stood near 25. Both suggest that immediate bearish pressure has eased, although they do not establish a confirmed trend reversal. The first upside obstacle is the 50-day EMA at $2,496. Beyond that, horizontal resistance at $2,548 and the 20-day EMA at $2,552 form a closely grouped barrier. Reclaiming those levels would strengthen the short-term recovery outlook.
Downside Risks
On the downside, the 2,355–2,356 area remains important. A daily close below it could expose support at $2,204, followed by $1,971 and $1,827 if selling continues.