Below $2,000: Ethereum Price Forecast as inflation and AI slump weigh on ETH

$1,940: Ethereum price today

• 6.5% was October’s annual US producer inflation rate. The reading marked the highest since November 2022, while Ethereum continues to trade below $2,000.
• Risk aversion in AI shares and the announcement that Strategy will be excluded from the MSCI index continue to weigh on the crypto market.
• Failure to reclaim $1,970 could leave ETH looking for support at $1,827.

$2,000 remains above Ethereum’s (ETH) trading price on Friday. The cryptocurrency remains below that level following the US producer inflation report.

At 6.5% YoY in October, the Producer Price Index (PPI) reached its highest reading since November 2022, though it fell short of the market’s 6.6 expectation. The monthly increase was 0.3%, against a 0.4% forecast. Excluding volatile food and energy prices, core PPI matched estimates at 5.0% YoY.

Following the inflation release, the probability of a quarter-basis-point increase exceeded 89%, strengthening expectations that the Federal Reserve (Fed) will raise rates at its December meeting.

Restrictive policy settings have historically tended to weigh on the performance of risk assets, including cryptocurrencies.

AI share weakness weighs on crypto sentiment

Persistent weakness in AI-related shares is also weighing on Ethereum and the broader crypto market. Over the past year, these markets have displayed a strong positive correlation.

AI shares sold off after Jensen Huang resigned as CEO and President of Nvidia (NVDA) on Thursday, following reports of an affair with three different women. The selling subsequently spread to cryptocurrencies.

With the S&P 500 down 0.4% and the Nasdaq Composite (NASDAQ) lower by 0.9%, risk aversion remains the dominant theme on Friday.

Another source of market pressure is the potential exclusion of Bitcoin treasury firm Strategy from the MSCI index. On Wednesday, MSCI said Strategy would be removed from the MSCI USA Index by November 30, potentially because its large BTC holdings are treated as non-operating assets. JPMorgan analysts estimate that the decision could prompt $2.8 billion in outflows from the BTC treasury company.

US spot ETH exchange-traded funds (ETFs) also reflect the weakness. SoSoValue data show net outflows of $70.5 million, marking a sixth straight day of net withdrawals.

All wallet cohorts’ on-chain cost bases now above ETH

During the latest decline, ETH slipped below the respective average on-chain cost bases of $2,123 and $1,780 for wallets holding 10K-100K ETH and >100K ETH, known as whales. Together, these groups hold 21.6M ETH, more than any other wallet cohort. Their average on-chain cost bases therefore represent important price levels.

A longer period of trading above those levels increases the likelihood that whales will sell to limit losses, adding to selling pressure.

Across every wallet cohort, from smaller investors to the largest holders, on-chain cost bases now exceed Ethereum’s trading price.

$1,970 support gives way: Ethereum technical outlook

On the daily chart, trading below the 20-day, 50-day and 100-day Exponential Moving Averages (EMAs) leaves ETH with a clear bearish bias. These averages are concentrated at roughly $2,200 to $2,320, forming a dense overhead barrier likely to constrain rallies for now. Meanwhile, a Relative Strength Index (RSI) near 25, deep in oversold territory, and a low Stochastic reading around 10 suggest downside momentum is stretched.

If the leading altcoin cannot regain $1,971, $1,827 could provide downside support. Below that lie horizontal levels at $1,706 and $1,600. Should selling continue, oversold momentum readings could help the market stabilise at those levels.

For a recovery, $1,971 is the first resistance level, followed by $2,101 and $2,204, then a more substantial hurdle near $2,250. Further up, EMAs concentrated around 2,314–2,319 strengthen the broader supply zone ahead of horizontal levels at $2,355 and $2,548.

(The technical analysis of this story was written with the help of an AI tool. Know more.)