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EthereumTechnical Analysis

Ethereum Price Forecast: ETH’s brief surge above $2,600 traps shorts despite hot inflation print

Ethereum price today: $2,510

  • Ethereum briefly surged above $2,600 on Friday after the US CPI print showed inflation remained persistent.
  • The move liquidated $216 million in short positions, causing open interest to crash.
  • ETH could tackle the $2,786 resistance if it recovers $2,626.

Ethereum (ETH) briefly surged above $2,600 on Friday, reaching its highest level since January, despite the consumer inflation print strengthening rate hike expectations.

Shorts get trapped again as bulls defy higher rate cut expectations

Ethereum’s quick jump sparked roughly $216 million in short liquidations over the past 24 hours, according to Coinglass data. The largest single liquidation order, worth nearly $20.3 million, took place on Hyperliquid.

As a result, ETH’s open interest fell to 12.5 million ETH, down 1.5 million ETH for the day. Open interest is the total worth of outstanding contracts in a derivatives market. A decline reflects reduced leveraged capital due to liquidations or investors closing positions.

ETH Open Interest. Source: Coinglass

The move follows August Consumer Price Index (CPI) data showing inflation remained persistent. The index rose 0.4% MoM and 3.4% year over year, both aligning with market expectations.

However, core CPI, which excludes volatile food and energy prices, increased 0.3% above estimates of 0.2%, but eased to 2.4% annually, according to forecasts.

Like Thursday’s August Producer Price Index (PPI) release, the figures strengthened expectations of a rate hike at the Federal Open Market Committee (FOMC) meeting next week. Polymarket data shows an 81% chance of a 25 bps increase.

A tightening Federal Reserve (Fed) policy could negatively impact risk assets like cryptocurrencies.

Unlike the PPI data, which briefly sent ETH to $2,400 and caused a spike in negative funding rates before bulls stepped in to defend the level, ETH pushed forward briefly, rising above $2,600 before retreating into the $2,500 zone. Hence, the move caught shorts off guard.

Shorts faced a similar fate earlier in August after the US Treasury buyback announcement sparked over $1 billion in single-day short liquidations.

Ethereum technical outlook: ETH could tackle $2,786 resistance if it recovers $2,626

On the daily chart, ETH holds a constructive bullish bias as price remains above the 20-, 50-, 100- and 200-day Exponential Moving Averages (EMAs). The cluster of shorter EMAs below spot price reinforces the underlying uptrend.

The Relative Strength Index (RSI) near 64 and a mid-range Stochastic reading suggest positive, but not yet overstretched, momentum as buyers keep control ahead of nearby resistance.

On the topside, ETH briefly surged above the $2,626 resistance but quickly reversed, falling back below $2,544. A daily close above both levels could see ETH tackle the $2,786 hurdle.

Chart Analysis ETH/USDT (Binance)
ETH/USDT daily chart

On the downside, immediate support is seen at the prior horizontal floor around $2,431, reinforced just beneath by the 20-day EMA near $2,417. A deeper pullback would expose the 50-day EMA at $2,235 and the broader demand band defined by the 200-day EMA at $2,182 before horizontal support at $2,172.

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