Ethereum is testing a key support level at 2,000, and a decisive break could signal that selling is spreading across crypto. Bitcoin has held up better, but its own 69,050.80 support would come into focus. Hawkish Fed repricing adds pressure to an already fragile market.
Ethereum fell to around 2,057 after briefly touching 2,005, just above a key Fibonacci support level. A decisive break below 2,000 could be an early warning of renewed selling across the broader crypto market. Bitcoin has held up comparatively better near 73,660, but it remains vulnerable if Ethereum's weakness spreads.
Hawkish Fed repricing hits crypto
The latest selling coincided with a sharp reassessment of US monetary policy after hawkish Fed comments and stronger-than-expected inflation data. Fed Governor Christopher Waller had warned that a 50bps December rate hike should be considered if core CPI remained around 0.3% mom or higher.
October's CPI then met that condition, with core inflation at 0.3% for a third consecutive month, against expectations of 0.2%. Headline CPI rose 0.4% mom, against expectations of 0.3%.
The US two-year Treasury yield jumped around 18bps on Tuesday to 4.746%. CME FedWatch pricing for cumulative tightening through June 2027 rose from approximately 44bps last Friday to 72bps.
However, the selloff had already started before Tuesday. Ethereum had declined substantially from its November 4 high of 2,445.67, which suggests the Fed news intensified existing weakness rather than starting the whole correction.
Ethereum sits on the 61.8% retracement
The decline from 2,805.98 has brought Ethereum almost precisely to the 61.8% retracement of the advance from 1,510.07 to 2,805.98, located at 2,005.11. This Fibonacci retracement level leaves 2,000 as the immediate downside reference.
A rebound, followed by a break above 2,445.67 resistance, would strengthen the case that the fall remains corrective. A firm break below 2,000 would raise the possibility of a retest of 1,510.07.
Bitcoin's 69,050.80 support comes into view
Bitcoin's decline from 87,354.33 has brought it toward 73,660, with the latest weekly low at 72,668.77. The 61.8% retracement of its advance from 57,736.97 to 87,354.33 lies at 69,050.80, still around 6% below the current price.
An Ethereum break below 2,000 would not, by itself, confirm that Bitcoin must follow. But a firm break below 69,050.80 would raise the possibility of resuming the broader downtrend from the 126,230.09 high.
Source: ActionForex
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