Ethereum Price News: ETH Maintains Bearish Structure and Could Head Back to $2,700

Ethereum (ETH) has gone down by 4% in the past 24 hours and is once again retesting the psychological $3,000 support area from above after some better-than-expected inflation numbers.

Trading volumes now account for 8% of the token’s circulating market cap, which is typically a high percentage that confirms strong participation.

This week was an important one for the network as the Fusaka upgrade was successfully implemented on Wednesday. This technical overhaul should supposedly lower fees and increase transaction processing speeds via layer-2 chains like Arbitrum and Base.

Meanwhile, long liquidations have spiked as a result of today’s drop to more than $300 million in the past 12 hours alone, with more than half of that total occurring in the past 4 hours.

The U.S. government shutdown delayed the release of key economic data, and the market is now catching up with what’s going on with the country’s economy. Crazy, right?

Post-PCE Spike Trapped Bulls and Liquidated Them All In a Matter of Hours

In September, the PCE price index, which is the key inflation metric monitored by the U.S. Federal Reserve, landed at 2.8%, in line with analysts’ estimates. However, the month-to-month variation was just 0.2% – the lowest relative change since May.

ETH/USD 15-min Chart (Binance) – Source: TradingView

Cryptos initially spiked after the report came out, but then they started to drop sharply, trapping bulls along the way and causing a spike in liquidations as prices plummeted.

ETH bounced off a low of $3,080 during the London session and reached $3,150, but sellers quickly showed up to dump the token, causing a much more pronounced drop that ultimately broke London’s lowest point.

Once again, the $3,000 level seems to be acting as a strong line of defense for ETH. Bulls probably know that the game is over if they lose this level by the end of the New York session, as bears will take advantage of the weekend’s low volumes to push prices to much lower levels.

ETH Could Drop by Nearly 40% After Failing to Recapture $3,250

Now, looking at the bigger picture in the daily chart, we have been tracking in previous price predictions how a double bottom that formed at $2,750 could play out in these next few days, and today’s drop is bad news for bulls.

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

A confirmed breakout above $3,250 would mean that ETH would have invalidated its bearish price structure. However, the price action rejected a move above this mark, which confirms the continuation of the downtrend.

This means that ETH could now be eyeing $2,500 in the near term, and could drop near the $2,000 level if negative momentum accelerates.

The Relative Strength Index (RSI) had been recovering ahead of this rejection. If this momentum oscillator breaks below the 14-day moving average, that would provide further confirmation that the downtrend will continue in the next few days as sellers are in control of the price action.

If buyers fail to keep ETH above $3,000, that would increase the odds of a much more pronounced upcoming downturn even further. Overall, the top altcoin features a downside risk of nearly 40% at this point if this rejection plays out as expected.