Ethereum tests the $2,431 support as hot US inflation pressures crypto market

Key takeaways

• Ethereum fell 0.7% as annual US producer inflation accelerated to 5.4%.
• Polymarket traders assigned a 62% probability to a rate hike at the next Fed meeting.
• ETH is testing support at $2,431 and $2,405, with resistance near $2,545.

Ethereum (ETH) traded 0.7% lower on Friday as it attempted to recover from selling pressure triggered by stronger US producer inflation data.

The hotter annual inflation reading increased expectations of tighter Federal Reserve policy, creating a challenging environment for risk assets. Although Ethereum remains above its major moving averages, retail selling, hesitant derivatives traders, and slowing institutional demand could limit its near-term recovery.

US producer inflation rises to 5.4%

The US Producer Price Index for final demand increased 0.4% in August, matching market expectations after a revised 0.1% gain in July.

On an annual basis, producer inflation accelerated to 5.4% from 4.8%. Energy prices contributed significantly to the increase, rising 4.2% amid higher ...