1% rise in Ethereum follows Fed hold as Coinbase Premium remains negative

$2,350: Ethereum price today

• $2,350 is narrowly exceeded by Ethereum. The move follows the Fed's decision to keep interest rates at 3.75-4.00%.
• The Coinbase Premium Index hits its weakest reading since February as US selling pressure persists.
• Following a rebound from the 200-day EMA, ETH tests resistance at $2,355.

$2,350 is narrowly exceeded as Ethereum (ETH) stages a modest recovery on Wednesday. The move follows the Federal Reserve's (Fed) decision to leave interest rates unchanged.

Rates on hold: ETH records modest gains

By a 10-2 vote, the Federal Open Market Committee (FOMC) kept interest rates at 3.75-4.00%. It emphasised that economic activity continues to expand strongly despite greater geopolitical uncertainty. With inflation still elevated, the Committee said incoming data would guide its assessment of the policy stance needed to return inflation to the 2% target. The decision comes after September's 25-basis-point rate hike.

Attention now turns to Thursday's Personal Consumption Expenditures (PCE) report, which provides the Fed's preferred measure of inflation.

An initial 1% advance took ETH above $2,350. The positive response came despite the decision being largely priced in: the CME FedWatch tool had put its probability at over 90%.

US risk aversion keeps pressure on ETH

Beyond the immediate reaction, selling by US investors continues to weigh on ETH.

Monday saw the Coinbase Premium Index drop to -0.181, its weakest reading since February, before a slight recovery to -0.142 on Tuesday. The index tracks the gap between ETH prices on Coinbase Pro and Binance. Negative readings have persisted since early September, indicating that selling pressure from US-based investors outweighs that from other regions.

Outflows also persisted across US spot ETH exchange-traded funds (ETFs). SoSoValue data showed net withdrawals of $60.2 million on Tuesday, marking a second consecutive day of outflows. Should withdrawals persist, ETH ETFs could face their worst month since their July 2024 launch.

$2,355 resistance in focus: Ethereum technical outlook after 200-day EMA rebound

Liquidations in Ethereum totalled $43.1 million over the past 24 hours, according to Coinglass. Short positions accounted for $36 million of that total.

After rebounding from the 200-day Exponential Moving Average (EMA) at $2,316, the leading altcoin is testing resistance at $2,355. The nearby 100-day EMA at $2,362 reinforces that barrier. A break higher would bring the $2,411 horizontal level into focus, ahead of the 20-day and 50-day EMAs at $2,424 and $2,450. ETH must overcome those averages before confronting key resistance at $2,548.

Support remains intact at the 200-day EMA. Below it, further downside buffers sit at $2,256, $2,204, and $2,107.

After the Stochastic reached oversold territory, downside pressure eased in both indicators. The Relative Strength Index (RSI) stood at 39 and the Stochastic at 33.