The inflation data reinforced expectations of a rate hike at the Federal Reserve's (Fed) December meeting, with odds of a quarter-basis-point increase rising above 89%.
Historically, risk assets like cryptocurrencies tend to underperform in restrictive policy environments.
Crypto market sentiment weakens alongside AI equities
Meanwhile, Ethereum, along with the wider crypto market, remains pressured by lingering weakness in AI-related equities, which have shown strong positive correlation over the past year.
Jensen Huang's resignation as CEO and President of Nvidia (NVDA) Thursday following reports of an affair with three different women sparked a sell-off in AI stocks, which spilled into the crypto market.
Risk-off sentiment continues to dominate on Friday, with the S&P 500 and Nasdaq Composite (NASDAQ) falling by 0.4% and 0.9%, respectively.
Bitcoin treasury firm Strategy's potential exclusion from the MSCI index is also weighing on the market. MSCI said Wednesday it will remove Strategy from the MSCI USA Index by November 30, potentially because the company treats large BTC holdings as non-operating assets. The decision could trigger $2.8 billion in outflows for the BTC treasury company, according to JPMorgan analysts.
The weakness is evident across US spot ETH exchange-traded funds (ETFs), which recorded a sixth consecutive day of net outflow, worth $70.5 million, per SoSoValue data.
ETH falls below all cohorts' on-chain cost basis
The recent decline saw ETH dropping below the $2,123 and $1,780 average on-chain cost basis of wallets with a balance of 10K-100K ETH and >100K ETH, also known as whales. These cohorts hold 21.6M ETH, the largest across all wallet cohorts, making their average on-chain cost basis key price levels.
The longer price stays above those levels, the higher the chances of whales adding to selling pressure in a bid to cut losses.
Ethereum is now trading below the on-chain cost basis of all wallet cohorts from small-scale to large-scale investors.
Ethereum technical outlook: ETH breaches $1,970 support
​On the daily chart, ETH maintains a clear bearish bias as price holds below the 20-day, 50-day, and 100-day Exponential Moving Averages (EMAs) clustered between roughly $2,200 and $2,320. The dense overhead EMA stack suggests rallies are likely to be capped for now, while the Relative Strength Index (RSI) deep in oversold territory near 25, alongside a low Stochastic reading around 10, hints that downside momentum is stretched.
On the downside, the top altcoin could find support at $1,827 if it fails to recover $1,971. Further down are the $1,706 and $1,600 horizontal levels, where oversold momentum indicators could help stabilize the market if the sell-off extends.
On the topside, immediate resistance appears at $1,971 ahead of $2,101 and $2,204, with a stronger barrier near $2,250. Above these, the EMA cluster around 2,314–2,319 reinforces a broader supply zone before the $2,355 and $2,548 horizontal levels.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
