Ethereum recovered above $2,400 on Friday after initially falling toward $2,340 following stronger-than-expected US Producer Price Index (PPI) inflation data.
Key Takeaways
- Ethereum bounced above $2,400 after hitting $2,340 amid a wholesale inflation surprise.
- September PPI increased 1.3% monthly and 6.3% annually, while core PPI climbed 5% year-over-year.
- US 10-year Treasury yields fell to 5.095%, their lowest level since September 22, helping ease market pressure.
- Key daily technical support sits at $2,355, while resistance gathers between $2,496 and $2,552.
Wholesale Inflation Surges Past Expectations
Data released on Friday showed the September US Producer Price Index rose 1.3% month-over-month and 6.3% annually, outstripping forecasts of 0.5% and 5.3%. Core PPI, which excludes food and energy costs, also exceeded projections by rising 0.7% monthly and 5% annually versus expectations of 0.3% and 4.4%.
The unexpected figures followed Wednesday's elevated CPI release, amplifying concerns over prolonged Federal Reserve policy tightening. Similar inflationary pressures previously contributed to crypto market pullbacks, including when hot US PPI inflation triggered widespread asset liquidations.
However, Ethereum quickly reversed its early losses as macro indicators shifted. The US 10-year Treasury yield fell to 5.095%, marking its lowest point since September 22. Simultaneously, the US Dollar Index (DXY) retreated to approximately 102.04. A similar retreat in Treasury yields helped stabilize asset valuations across the cryptocurrency landscape.
Technical Outlook: Technical Support Holds Above $2,355
On the daily price chart, Ethereum successfully defended support near its 100-day Exponential Moving Average (EMA) at $2,356 and horizontal support at $2,355. Buyers pushed price action back above $2,411, with technical indicators reflecting reduced immediate selling pressure. The Relative Strength Index (RSI) rose to 40.9, while the Stochastic Oscillator registered at 25.
Despite the rebound, several resistance barriers lie ahead. The 50-day EMA at $2,496 forms the initial hurdle, followed closely by horizontal resistance at $2,548 and the 20-day EMA at $2,552. On the downside, if sellers breach $2,355 on a daily closing basis, subsequent support levels sit at $2,204, $1,971, and $1,827.
Why It Matters
The rapid market reversal demonstrates that crypto valuations remain tightly coupled with US Treasury yields and US dollar strength. Even as inflation readings exceed forecasts, declining yields provide crucial liquidity relief for risk assets. Traders should watch whether Ethereum can break through the $2,496–$2,552 resistance cluster to validate a sustained recovery.
