Ethereum rose above $2,400 again on Friday following a stronger-than-expected U.S. wholesale inflation report, which briefly sent the cryptocurrency to $2,340. In September, the Producer Price Index (PPI) increased by 1.3% month-over-month and 6.3% year-over-year, compared to forecasts of 0.5% and 5.3%. The core PPI, excluding food and energy, also exceeded expectations: +0.7% month-over-month and +5% year-over-year versus 0.3% and 4.4%.
The PPI data followed Wednesday's release of the CPI, which also came in hotter than expected, raising concerns about persistent inflation and questions regarding monetary policy. ETH initially fell along with other risk assets but recovered once Treasury yields and the dollar retreated.
The decline was accompanied by concentrated losses among bullish traders: pressure on leveraged positions intensifies sales as the price drop undermines collateral. The data covers a full 24 hours, including volatility around both publications, not just the reaction to the PPI.
The rebound was aided by the drop in the yield on 10-year U.S. bonds to 5.095% – the lowest since September 22. This eased one of the sources of pressure following the rate hikes. The U.S. Dollar Index also reversed its rise after the CPI, falling to around 102.04. Together, the decline in yields and the dollar provided a more favorable backdrop for the recovery of the crypto market, although inflation concerns remained.
On the daily chart, Ethereum bounced off the area of the 100-day EMA ($2,356) and horizontal support at $2,355 after a brief dip below. Buyers are attempting to maintain the recovery above $2,411. The RSI rose to 40.9, and the stochastic oscillator is around 25; both indicate that immediate selling pressure has eased, but there is no confirmed trend reversal.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.
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