Ethereum Price Forecast: Are inflation and the AI decline keeping ETH below $2,000?

Ethereum today: Price stands at $1,940

• Ethereum remains under $2,000 amid a rise in annual US producer inflation to 6.5% in October, the highest reading since November 2022.
• Pressure persists across the crypto market as investors shun risk in AI stocks and weigh the announcement that Strategy will be excluded from the MSCI index.
• Failure to reclaim $1,970 could leave ETH looking for support at $1,827.

Ethereum (ETH) remains under pressure below $2,000 on Friday, with the US producer inflation report setting the backdrop for trading.

At 6.5% YoY in October, the Producer Price Index (PPI) reached its highest level since November 2022, although it fell short of market expectations of 6.6. The monthly increase was 0.3%, against a forecast of 0.4%. Excluding volatile food and energy prices, core PPI stood at 5.0% YoY, matching estimates.

Expectations that the Federal Reserve (Fed) will raise rates at its December meeting strengthened after the inflation release. The probability of a quarter-basis-point increase climbed above 89%.

Restrictive monetary policy has historically been an environment in which risk assets, including cryptocurrencies, tend to lag.

Why is weakness in AI equities weighing on crypto sentiment?

Persistent softness in AI-related shares is also keeping Ethereum and the broader crypto market under pressure. Over the past year, crypto assets have displayed a strong positive correlation with these equities.

A sell-off in AI shares spread to cryptocurrencies after Jensen Huang resigned on Thursday as CEO and President of Nvidia (NVDA), following reports of an affair with three different women.

Investors remain risk-averse on Friday: the S&P 500 is down 0.4%, while the Nasdaq Composite (NASDAQ) has declined 0.9%.

Another source of pressure is the potential removal of Bitcoin treasury firm Strategy from the MSCI index. On Wednesday, MSCI said Strategy would be removed from the MSCI USA Index by November 30, potentially because its substantial BTC holdings are treated as non-operating assets. JPMorgan analysts estimate that the decision could lead to outflows of $2.8 billion from the BTC treasury company.

US spot ETH exchange-traded funds (ETFs) reflect the same weakness. SoSoValue data show net outflows of $70.5 million, marking the sixth straight day of net withdrawals.

What does ETH trading below every cohort's on-chain cost basis signal?

Following 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. Known as whales, these groups hold 21.6M ETH, more than any other wallet cohort, which makes their average on-chain cost bases important price levels.

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

Across every wallet cohort, from small investors to large holders, the on-chain cost basis now exceeds Ethereum's trading price.

Ethereum technical outlook: Can ETH reclaim $1,970 after breaking support?

A distinctly bearish bias persists on ETH's daily chart, with the price below the 20-day, 50-day and 100-day Exponential Moving Averages (EMAs), grouped roughly between $2,200 and $2,320. This tight band of overhead EMAs points to limited room for rallies for now. However, the Relative Strength Index (RSI) is deep in oversold territory near 25, while the Stochastic reading is low at around 10, suggesting that downward momentum is stretched.

If the leading altcoin cannot reclaim $1,971, support could emerge at $1,827. Below that, the horizontal levels of $1,706 and $1,600 offer further potential support, where oversold momentum readings could help stabilise the market should selling continue.

Any recovery would first face resistance at $1,971, followed by $2,101 and $2,204, with a firmer hurdle near $2,250. Further up, the EMAs grouped 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.)