After U.S. producer inflation rose in August, risky assets came under pressure again, and Ethereum fell slightly on Friday. Market expectations for the Federal Reserve to further tighten policy have increased, posing more resistance to a short-term rebound in crypto assets.
US inflation fuels bets on interest rate hikes.
Data shows that the U.S. Final Demand Producer Price Index ( PPI ) in August rose 0.4% month-on-month, in line with market expectations, and was higher than the revised 0.1% in July. On an annual basis, PPI increased by 5.4% year-on-year, from 4.8% previously. Among them, rising energy prices were one of the main driving factors.
After the release of this set of data, market bets on the Federal Reserve's next interest rate hike have intensified. Polymarket Data shows that traders expect a 62% probability of an interest rate hike at the Fed's next meeting, with that probability rising to 71% by October. Higher interest rates typically compress the valuations of risky assets and also reduce the activity of leveraged trading and speculative funds.
ETF Net inflows continue to slow down
Despite the weakening macro environment, US spot Ethereum ETF still recorded a net inflow of funds this week. On Wednesday, related products saw a total net inflow of $34.75 million, reversing the $24 million net outflow on Tuesday, indicating that some institutional funds are still making allocations at lower levels.
However, looking at the weekly data, the pace of institutional buying has slowed down. Last week, spot Ethereum ETF attracted $218.4 million in funds, which is significantly lower than the high of $824 million set the previous week. This indicates that institutional demand is still positive, but the marginal increase is weakening.
On-chain position changes also indicate that market divisions are continuing to widen. Last week, retail investors sold a total of approximately 307,000 ETH, which is significantly higher than the approximately 82,000 ETH that whales added during the same period. The continuous reduction in retail holdings means that the amount of tradable positions in the market is increasing, thereby raising the difficulty of further short-term gains.
$2,431 becomes a short-term support level
In terms of price performance, Ethereum is testing the horizontal support at around $2,431, while also approaching the 20-day exponential moving average near $2,405. Although there has been a short-term decline, ETH is still above the areas where the 50-day, 100-day, and 200-day moving averages are located, so the overall upward trend has not yet been disrupted.
If prices stabilize and rebound, the market will first focus on the resistance level around $2,545, with further upper resistance levels at $2,626 and $2,787. If prices fall below the support range of $2,405 to $2,431, market attention may shift to the moving average support area between $2,223 and $2,256.
Judging from the current trend, relatively strong macro data is suppressing risk appetite. Meanwhile, the divergence between ETF capital inflows, large institutional investors' increased holdings, and retail investors' reduced holdings has also kept Ethereum's short-term trend in a tug-of-war state.
