Ethereum Price News: Can a Lower-Than-Expected Inflation Print Push ETH Above $3K?

Ethereum (ETH) is once again pushing hard to climb back to $3,000 after a positive inflation report that saw prices in the United States rise by 2.7% on an annualized basis, below analysts’ forecasts.

A delayed November report was published earlier today, and the market reacted positively as analysts had predicted that the consumer price index (CPI) would surge by 3.1% in the past 12 months.

Lower-than-expected inflation is positive as it could prompt the Federal Reserve to ease its grip on interest rates and may raise the odds of an earlier-than-anticipated cut.

FedWatch’s Rate Cut Probabilities for January FOMC Meeting – Source: CME Group

However, data from FedWatch shows no changes in the odds for a rate cut for the FOMC’s meeting in January. At the time of writing, only around a quarter of analysts believe that the Fed will lower rates by then.

If those odds start to increase, we could expect a significant uptick in the price of cryptocurrencies.

Trading Volumes Rise as ETH Tries to Hit $3,000 Again

Trading volumes for ETH jumped by 65% in the past 24 hours and currently account for 8% of the token’s circulating market cap as the buying pressure seems to have picked up.

Meanwhile, liquidation data is mixed in the past 24 hours as the market has been trading relatively range-bound in the past few hours. Over $200 million worth of short positions have been liquidated during this period, while $400 million worth of long ones were also wiped out.

Total Crypto Liquidations – Source: CoinGlass

The market seems fixated on pushing ETH back to $3,000, possibly as it is looking for the kind of buy-side liquidity that can get prices moving once again.

ETH losses in the past 7 days have accelerated to 6%, after the market rejected a move above a structural area at $3,300.

This price level was critical to determine if ETH was ready to reverse its downtrend. A rejection of this mark confirmed that we are still in a sellers’ market as the price structure remains bearish.

ETH Could Drop to $2,100 If This Happens

In a recent Ethereum price prediction, we emphasized that a trend line support has formed as a result of ETH’s latest recovery. However, the $2,700 area remains the key support to watch in case the price keeps dropping.

ETH/USD Daily Chart (Coinbase) – Source: TradingView

Meanwhile, if the price action reaches $3,300 again after bouncing off this mark, we could get another try at this pivotal level. A bullish breakout could have massive implications for ETH in the long term as it would confirm a trend reversal.

The Relative Strength Index (RSI) recently sent a sell signal after dropping below the 14-day moving average. This momentum oscillator currently sits below 50, meaning that negative momentum prevails.

If we do get a bearish breakout below $2,700, the next stop for ETH could be the $2,100 support, meaning a total downside risk of 22%.