Ethereum price pulled back, ending the recent bull run as investors started to take profits. ETH dropped to a low of $2,493 on Tuesday morning, down from this week’s high of $2,615. It remains about 80% below the current level. This article explores whether the coin will resume the uptrend after the US inflation data.
US Inflation Data Ahead
The Ethereum price has been in a strong bullish trend in the past few days, as investors bought the dip following months of weakness. This surge also triggered more gains among other ERC tokens like Shiba Inu and Pepe.
Ethereum price also jumped after the developers implemented the Pectra upgrade, which implemented eleven upgrades to enhance scalability, user experience, staking efficiency, and validator operations. It was the most significant upgrade since The Merge.
Pectra will be succeeded by the Fusaka Upgrade, introducing features such as peer data availability sampling, Ethereum Virtual Machine Object Format, increased layer 1 gas limits, and layer 2 improvements.
ETH lost momentum on Monday due to concerns that the Federal Reserve will not cut interest rates soon. Polymarket traders believe the Fed will deliver just two interest rates this year. This explains why the US Dollar Index (DXY) continued surging, reaching a high of $101.2 from a low of $97.
Tuesday’s upcoming US inflation data will be the next important catalyst for the ETH price. Economists anticipate the data will reveal a rise in the headline Consumer Price Index to 2.5% in April, with the core CPI holding steady at 2.8%. A higher CPI figure than expected will lead to more ETH price weakness and vice versa.
Ethereum Price Technical Analysis
The daily chart shows that the ETH price has bounced back in the past few days, moving from a low of $1,386 last month to a high of $2,615. It pulled back slightly on Tuesday as some investors started to take profits.
Ethereum remains above the key support level at $2,130, the lowest level since August 2024 and the neckline of a small inverse head-and-shoulders pattern that formed recently.
The most likely scenario is for Ethereum to resume the uptrend and retest the important resistance level at $3,000, which is about 20% above the current level.
The alternative scenario is where the ETH price drops, retests the important support level at $2,130, and then resumes the uptrend. This performance is a break-and-retest pattern and a popular continuation signal.
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