Ethereum (ETH) gained 1.7% over 24 hours to reclaim the $2,431 level, holding above the threshold despite the Federal Reserve's first interest-rate increase in three years and the CLARITY Act's failure to advance in the US Senate.

Data from on-chain and derivatives markets point to renewed buying among crypto-native traders: exchange outflows, buy-side activity in perpetual futures, and short liquidations all suggest traders are purchasing the pullback. Institutional flows tell a different story, as US spot Ethereum exchange-traded funds continued to record net outflows, indicating that demand from traditional investment vehicles remains weak.

Ethereum Holds Above $2,400 After Fed Rate Hike

The Federal Reserve on Wednesday raised its benchmark interest-rate range by 25 basis points to 3.75%–4.00%. The decision was unanimous, passing 12–0, and was widely anticipated, with markets assigning a probability above 90% to the increase before the meeting. Most Fed officials also expect another rate hike before the end of 2026.

Higher interest rates generally pressure cryptocurrencies by raising borrowing costs and increasing the appeal of yield-bearing assets. Ethereum nonetheless remained above $2,400, suggesting traders had largely priced in the decision.

The CLARITY Act, a market-structure bill aimed at clarifying how digital assets are regulated in the United States, failed to secure the 60 Senate votes required to invoke cloture and likewise produced a temporary decline before buyers returned.

Exchange Outflows Hit Largest Daily Volume Since June

More than 152,000 ETH left cryptocurrency exchanges on Tuesday, marking the largest daily net outflow since June, according to CryptoQuant. Inflows briefly exceeded withdrawals on Wednesday, but the metric subsequently returned to net outflows.

Large exchange withdrawals can suggest that investors are moving ETH into private wallets rather than preparing to sell. They also reduce the supply immediately available for trading, potentially supporting prices if demand remains steady. However, exchange flows can reflect transfers between custodians and do not always represent outright buying.

Derivatives Data Signal Buy-Side Return

Ethereum's taker buy-sell ratio has returned to buy-side territory after briefly signaling stronger selling on Tuesday. The ratio compares market-buying volume with market-selling volume in perpetual futures; a reading above one indicates that buyers using market orders are more aggressive than sellers.

Liquidation data also points to improving sentiment. Ethereum recorded $221 million in liquidations on Tuesday, with long positions accounting for 88% of the total. Over the subsequent 24 hours, liquidations declined to $87.6 million, of which short positions accounted for $45.4 million, suggesting that rising prices forced some bearish traders out of the market.

Open interest remained close to 13 million ETH across the two days, while funding rates returned to positive territory after briefly becoming negative. Funding rates are the periodic payments exchanged between long and short traders in perpetual futures markets, and they typically turn positive when demand for long positions outweighs demand for short ones.

ETF Outflows Highlight Continued Institutional Weakness

Institutional flows present a less constructive picture. US spot Ethereum ETFs, which began trading in July 2024, recorded $224.1 million in net outflows on Wednesday, following $141.4 million in withdrawals on Tuesday, according to SoSoValue, bringing the combined loss to $365.5 million across two sessions.

The continued ETF selling contrasts with the accumulation signals visible on cryptocurrency exchanges and in derivatives markets. This divergence suggests crypto-native buyers may be absorbing the decline while traditional investment vehicles face redemptions. The direction of ETF flows in the sessions ahead will therefore serve as a reference point for whether this split between crypto-native and traditional demand persists.

ETH Reclaims the 20-Day EMA

Ethereum has recovered above the $2,431 horizontal level and its 20-day exponential moving average, both of which provided important support during the past month.

Momentum indicators remain neutral. The Relative Strength Index stands at 53, while the Stochastic oscillator is near 26, readings that suggest consolidation rather than overbought conditions.

Immediate resistance sits at $2,544. A sustained breakout could allow ETH to target $2,626 and then $2,786. If Ethereum loses $2,431, the 50-day EMA at $2,282 and the 200-day EMA at $2,269 form the next major support zone, with lower levels at $2,172, the 100-day EMA at $2,163, and horizontal support at $1,961.

Source: CoinJournal