Ethereum has rebounded to $2,444 following the Fed rate hike announcement, recovering from the $2,356 low reached after the CLARITY Act failed in the Senate. The cryptocurrency is experiencing a 3.6% daily decline to $2,400.95, down from the previous $2,400 level, as reported by latest market data. The market responded positively after the Fed rate hike, with $18.78 billion in volume and maintaining a $293.24 billion market capitalization. This latest pullback comes amid broader risk-off sentiment across crypto markets, with the decline following the failure of the CLARITY Act to clear the 60-vote cloture threshold in the Senate on Tuesday. The bill's cloture motion reportedly failed in a 49-50 vote, short of the 60 votes needed to proceed, weakening expectations that Congress would soon establish clearer divisions between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Despite the regulatory uncertainty, Ethereum has maintained its position above the $2,350 support level, with the 20-day EMA near $2,425 continuing to hold as a floor through recent pullbacks. The market has seen about $220 million in liquidations over the past 24 hours, driven by $194 million in long liquidations, as reported by Coinglass data. However, exchange netflow data shows withdrawals from exchanges have outpaced deposits over the past five days, pushing exchange reserves down by 159K ETH during the period, suggesting investors are moving funds to private wallets. Over the past week, Ethereum price dropped around 3%, with the altcoin dipping to $2,388 after the CLARITY Act failed, then rebounding to $2,400 shortly after. In comparison, other major altcoins like XRP and Hyperliquid have dropped over 8%.
High net worth investors, especially whales, have started to accumulate significantly following the $2,400 support level. Two Ethereum whales purchased 5195 ETH worth approximately $12.9 million while ETFs continue to sell, as reported by AMBCrypto. A newly created wallet withdrew 2,695 ETH worth $6.94 million from Gemini and staked it all, while another whale returned after nine months of inactivity and withdrew 2,500 ETH worth $6.02M from Binance. This accumulation spree has continued at press time, with $100 million worth of ETH purchased as the altcoin signaled a rebound. Exchange activity has benefited from this renewed accumulation, with Ethereum's netflow jumping to 64.3K ETH the previous day, though it has since plummeted to -32.5K ETH at press time, implying that more tokens had left exchanges. The strong exchange outflows, especially from whales as the asset attempts a recovery, imply these investors expect a sustained upward movement. However, Ethereum Spot ETFs recorded outflows for two consecutive days after more than a month, with ETH ETFs recording -$224 million in outflows over the past days, marking the highest outflows since January. Bitwise sold 14.3K ETH worth $34.21 million, marking the first outflow from Bitwise since late July, a clear sign of a strong market shift in sentiment.
On the daily chart, ETH has slipped below initial supports at the 20-day Exponential Moving Average (EMA) and $2,431 level, though it holds above the 200-, 100- and 50-day EMAs clustered between roughly $2,153 and $2,270, keeping the broader bias constructive despite the recent pullback from highs. Momentum has cooled, with the 14-day Relative Strength Index (RSI) hovering near a neutral 51 and the Stochastic slipping into the oversold region, suggesting buyers are pausing rather than abandoning the uptrend as price consolidates just under the short-term 20-day EMA at $2,435. The daily RSI stands at 52.09, having fallen below its moving average of 61.02 after retreating from overbought territory, showing that bullish momentum has faded since ETH's late-August rally. Ethereum's recovery remains below the Bollinger Bands' middle line at $2,464.49, with the upper Bollinger Band at $2,544.69 forming the broader resistance zone between approximately $2,465 and $2,545. A daily close above that range would strengthen the case that the correction has ended. Conditions look weaker on the 4-hour chart, with ETH trading below Supertrend resistance at $2,526.61, while the indicator's former support near $2,441.90 has been lost. The 4-hour Chaikin Money Flow stands at minus 0.07, indicating that selling pressure is slightly stronger than buying pressure, limiting conviction behind the latest rebound. On the downside, if ETH fails to recover $2,431, it could find support at the 50-day EMA around $2,270 and the 200-day EMA at $2,266, with further downside exposing $2,172 and the 100-day EMA near $2,153. A deeper slide would expose $2,056 as a deeper support level.
The consistent buying strength comes amid strong expectations of a rate hike in the upcoming Federal Open Market Committee (FOMC) meeting on Thursday, with investors anticipating a 25-basis-point rate increase, with odds at 80% at the time of writing, according to the CME FedWatch tool. Most of the buying pressure has potentially stemmed from wallets with a balance of 10K-100K ETH, otherwise known as whales, who added roughly 200K ETH to their collective balance over the past week, while retail wallets with balances of 100-1K and 1K-10K ETH distributed roughly 192K ETH, extending their selling trend consistent since the beginning of the year. The crypto market's CLARITY Act has failed to advance in the Senate after failing to secure the 60 votes needed to invoke cloture, with the move sparking immediate selling pressure in the crypto market. US spot Bitcoin ETFs recorded $159.9 million in net inflows, led by BlackRock's IBIT at $134.3 million, while Ethereum ETFs attracted about $121 million, with ETHA contributing $80.5 million. However, Ethereum ETFs recorded approximately $141.5 million to $142.3 million in net outflows during the reported session, with BlackRock's ETHA accounting for about $98 million and Bitwise's ETHW recording around $34.4 million in withdrawals. Despite steady institutional buying, Bitcoin remained near the mid-$75,000 range and Ethereum around $2,400-$2,480, with the muted price response suggesting ETF demand is being partly offset by macro uncertainty, profit-taking, derivatives positioning, and broader liquidity conditions. US-listed spot Ethereum funds also saw heavy selling, recording their largest outflow since January on Tuesday as the bill stalled, with Grayscale's head of research arguing that crypto can advance without the Clarity Act.
The failed vote removes a potential catalyst for ETH in the short term, but its longer-term supply dynamics remain intact. CryptoQuant put exchange reserves at 14.6 million ETH, the lowest level since 2016, with reserves having fallen steadily since 2022, and this week's inflows barely register against that trend. Staking also continues to absorb supply, with analyst Leon Waidmann putting the total staked at 43 million ETH, a record, or close to 35% of supply. Coins in a validator cannot be sold until the queue is cleared, leaving a smaller pool of ETH available to trade than in any previous cycle. Valuation has improved alongside it, with analyst MorenoDV noting that ETH's MVRV ratio has moved above 1 and has remained there for several sessions, and ETH also trades above its realized price near $2,300. "A sustained MVRV > 1 together with ETH holding above its ~$2.3K Realized Price would strengthen the case that June–July marked the cycle low and that the market is transitioning from repair into expansion," the analyst said. However, CryptoQuant's Coinbase Premium Index sits near -0.08, indicating softer US spot demand relative to offshore markets. Taken together, ETH's supply backdrop remains supportive, but demand has yet to provide a clear counterweight to the recent selling pressure. The major challenge facing Ethereum now is institutional bearishness during periods of weakness and indifference during stability, with whales' capital inflow remaining inadequate compared to outflows from institutional investors.
