Ethereum (ETH) dropped 1% on Friday, briefly falling below $2,400 as oil prices surged. Brent Crude climbed 3.6% to $109.7, its highest level since May, putting pressure on risk assets like cryptocurrencies and equities. The crypto market fell 1.3%, while the S&P 500 and Nasdaq declined by 1.4% and 2.3%, respectively, with tech and AI-related stocks leading the selloff.
The decline followed higher-than-expected inflation data, with the Producer Price Index (PPI) and Consumer Price Index (CPI) rising 6.3% and 3.7% year-over-year in September, exceeding forecasts. Ethereum faced liquidation pressure, with $72 million wiped out in the market, and long traders in ETH futures recording roughly $500 million in liquidations since Monday.
Exchange reserves for Ethereum increased by about 290K ETH over the past three weeks, indicating rising sell-side pressure. Additionally, US spot ETH exchange-traded funds (ETFs) saw net outflows of $60.2 million on Thursday, marking the 12th outflow in the last 13 trading days.
Technically, ETH is bearish in the near term, slipping below the 50-day and 20-day Exponential Moving Averages (EMAs) at $2,492 and $2,538, respectively. Immediate support is near $2,414, followed by $2,355 and the 100-day EMA at $2,347.87. A break below this area could target deeper supports at $2,204 and $1,971. Resistance levels include the 50-day EMA, $2,548, and the 20-day EMA, with further hurdles at $2,636 and $2,781.