Ethereum Price Forecast: Inflation and AI decline keep ETH below $2,000

Ethereum trades at $1,940 today

• US producer inflation reached 6.5% annually in October, its highest reading since November 2022, while Ethereum remains below $2,000.
• Risk aversion in AI shares and the announcement of Strategy's exclusion 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.

Following the US producer inflation release, Ethereum (ETH) remains below $2,000 in Friday's trading.

October's Producer Price Index (PPI) increased by 6.5% YoY, marking its highest reading since November 2022 but falling short of market expectations of 6.6. On a monthly basis, the index advanced 0.3%, against a forecast of 0.4%. Excluding volatile food and energy prices, core PPI registered 5.0% YoY, matching estimates.

Expectations of a rate rise at the Federal Reserve's (Fed) December meeting strengthened following the inflation figures, with the probability of a quarter-basis-point increase climbing above 89%.

Restrictive policy environments have historically tended to weigh on the performance of risk assets such as cryptocurrencies.

AI share weakness weighs on crypto market sentiment

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

Following reports of an affair with three different women, Jensen Huang resigned as CEO and President of Nvidia (NVDA) on Thursday. His departure prompted selling in AI shares that spread to cryptocurrencies.

With risk aversion still prevailing on Friday, the S&P 500 and Nasdaq Composite (NASDAQ) are down 0.4% and 0.9%, respectively.

Another source of pressure is the potential exclusion of Bitcoin treasury firm Strategy from the MSCI index. On Wednesday, MSCI said it would remove Strategy from the MSCI USA Index by November 30, potentially because its substantial BTC holdings are treated as non-operating assets. According to JPMorgan analysts, the decision could result in $2.8 billion in outflows for 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 consecutive day of net withdrawals.

ETH slips beneath every wallet cohort's on-chain cost basis

During the latest decline, ETH slipped beneath the average on-chain cost bases of $2,123 and $1,780 for wallets holding 10K-100K ETH and >100K ETH, respectively, also known as whales. With 21.6M ETH held by these groups, more than any other wallet cohort, their average on-chain cost bases represent important price levels.

An extended period above those levels increases the likelihood that whales will contribute to selling pressure as they seek to limit losses.

Across every wallet cohort, from small investors to large holders, Ethereum's current price is below the on-chain cost basis.

Ethereum technical outlook: ETH breaks beneath $1,970 support

Trading below the 20-day, 50-day and 100-day Exponential Moving Averages (EMAs), grouped at roughly $2,200 to $2,320, leaves ETH with a distinctly bearish daily chart. This concentration of overhead EMAs is likely to limit rallies for the time being. However, downside momentum appears stretched: the Relative Strength Index (RSI) is deep in oversold territory near 25, while the Stochastic reading is low at around 10.

Should the leading altcoin fail to regain $1,971, support could emerge at $1,827. Below that, the horizontal levels at $1,706 and $1,600 offer further potential support, where oversold momentum indicators could help stabilise the market if selling continues.

Any recovery faces initial resistance at $1,971, followed by $2,101 and $2,204, before a more substantial hurdle near $2,250. Further up, the EMAs clustered around 2,314–2,319 strengthen a wider supply zone ahead of the 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.)