Ethereum (ETH) price quickly reversed its 24-hour gains following the US Consumer Price Index (CPI) report, which affirmed easing inflation. The largest altcoin dropped 2.5% alongside Bitcoin price correction below $60,000 after peaking above $61,000 on Wednesday.

Ethereum Price Uptrend Falters After CPI Data Release

Ethereum price has continued with lock-step movement since Monday last week, reflecting the uncertainty that still shrouds the cryptocurrency market. For a moment, investors believed that the pre-CPI release dash above $2,700 would inch closer to $3,000, but a surprise correction has seen ETH price drop to exchange at $2,645.

Based on the CPI report, monthly inflation for July increased 0.2% bringing the annual inflation below 3% to settle at 2.9% for the first time since March 2021. The actual CPI came in lighter than what economists had expected at 0.2% and 3%, respectively. Not considering the prices of food and energy, the core CPI remained steady at 3.2% annually, meeting expectations.

Although the Federal Reserve has hinted at slashing interest rates, the sudden correction in Ethereum and Bitcoin prices, shows a lack of conviction among traders who remain cautiously optimistic. With the Core CPI steady, the Fed is unlikely to consider a larger cut of 50 basis points, driving expectations down to 25 basis points.

ETH ETF Drawdown Raises Concerns

Ethereum price marginally rallied to $3,561 after ETH ETFs started trading in July. However, due to a dismal uptake compared to Bitcoin ETFs in Q1, headwinds continue to weigh on Ether.

According to SoSoValue, Ethereum ETFs have posted only seven days of net inflows since launch compared to nine days of net outflows. The last two days have been bullish for the stock exchange-traded products, with $4.93 million and $24.34 million in net inflows.

Despite the resurgence, Ether ETFs still lag, considering the net total of $376.67 million outflows. Investors anticipated a Bitcoin-like rally but the dismal performance narrows the chances of Ethereum price reaching ATH in 2024.

Meanwhile, the impressive upswing from $2,111 slowed down at $2,774 on Wednesday, followed by an immediate correction to exchange at $2,645. According to this ETH price prediction, the falling Relative Strength Index below 50 reinforces the short-term bearish grip.

The confluence resistance formed at $2,665 by the 20-day and 50-day Exponential Moving Averages (EMAs) paints a grim short-term picture. A retest of $2,600 support is expected within the American session. If traders feel the pinch and close more long positions, a further decline to $2,100 will follow.

In his latest technical outlook on the assets, Peter Bradt, a renowned trader, pointed at ETH falling to $1,651. Bradt highlighted a five-month rectangle pattern and a rising wedge, both of which reinforce the bearish thesis. Traders can expect a 3:1 profit-to-loss ratio; however, patterns tend to be unreliable, calling for more analysis using key technical indicators.

Ether $ETH
I am posting this not as a slam on ETH, even though I’m not a fan, but to describe how I trade – so ETHernuts, dont take offense. I am as quick to go long on a good pattern as short on a good pattern
1. 5-mo rectangle (my fav pattern) completed Aug 4
2. Retest of BO… pic.twitter.com/h89EAzP7cb

— Peter Brandt (@PeterLBrandt) August 14, 2024

Based on IntoTheBlock’s IOMAP model, robust support between $2,263 and $2,345 is expected to come in handy and stop the sell-off. Approximately 2.24 million addresses purchased 50.36 million ETH—enough to trigger a larger breakout toward $3,000.

The IOMAP model reveals shrinking resistance toward $3,000. This means that with a minor push above the $2,800 hurdle, Ether will be on the way to launch above $3,000.

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John Isige

John is a seasoned crypto expert, renowned for his in-depth analysis and accurate price predictions in the digital asset market. As the Price Prediction Editor for Market Content at CoinGape Media, he is dedicated to delivering valuable insights on price trends and market forecasts. With his extensive experience in the crypto sphere, John has honed his skills in understanding on-chain data analytics, Non-Fungible Tokens (NFTs), Decentralized Finance (DeFi), Centralized Finance (CeFi), and the dynamic metaverse landscape. Through his steadfast reporting, John keeps his audience informed and equipped to navigate the ever-changing crypto market.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.