Ethereum Price Soars as Weaker US CPI Lifts Crypto Sentiment

The Ethereum price has surged 4% in the past 24 hours to trade at $2,947 as of 4:00 a.m. EST on a 41% surge in trading volume to $36 billion.

Ethereum price increase comes as weaker US inflation drives positive market sentiment, even as the Bank of Japan (BOJ) raised interest rates. The US Consumer Price Index (CPI) rose 2.7% over 12 months to November, down from 3% in September, surprising analysts and signaling a slowdown in price pressures.

🚨BREAKING: U.S. CPI came in below expectations at 2.7% vs 3.1% expected.

This shows inflation is cooling down.

FED now has more room for rate cuts and monetary easing.

This is really bullish for markets. pic.twitter.com/ZWrzqwNBaA

— Bull Theory (@BullTheoryio) December 18, 2025

Falling costs for hotels, milk, clothing, and housing, along with holiday discounts, reinforced investor confidence. That means softer inflation increases the likelihood of US Federal Reserve rate cuts, which fuels optimism in cryptocurrencies like Ethereum and Bitcoin.

While some risks remain, from previous tariffs and tight labor supply in sectors such as farming, hospitality, and construction, the market reacted strongly to the cooling CPI, showing that US economic signals continue to have an outsized impact on crypto sentiment.

Don’t fight the BOJ: -ve real rates is the explicit policy. $JPY to 200, and $BTC to a milly. pic.twitter.com/PdZh87ruVI

— Arthur Hayes (@CryptoHayes) December 19, 2025

Despite this, the BOJ raised interest rates by 25 basis points to 0.75%, the highest in 30 years, marking its second hike this year. Governor Kazuo Ueda indicated that further increases may follow in 2026, although real rates remain negative, keeping Japanese financial conditions accommodative.

The Yen weakened to around 156 per dollar, lowering the immediate risks of a carry trade unwind. Bitcoin showed volatility in response to the BOJ hike, with past rate increases historically triggering 23–31% declines. US 10-year Treasury yields rose to 4.14%, and the dollar index (DXY) reached 98.52.

Ethereum Bearish OI-Weighted Funding Spikes, Market Stabilizes

Ethereum’s price OI-weighted funding rate, showing what traders pay or earn on their positions, was mostly positive. However, there are brief negative spikes around October 10–12, indicating short-term bearish pressure.

Despite these funding rate fluctuations, the ETH price trended downward overall, aligning with negative funding rate periods and showing that short-term bearish pressure contributed to the decline.

The funding rate has stabilized near zero, implying a balanced market between longs and shorts. While minor positive spikes continue, they have not translated into strong upward price momentum, highlighting cautious or neutral sentiment.

Ethereum Price Faces Downside Risk As $2,800 Support Is Tested

The daily ETH/USDT price actionshows a clear transition from consolidation to a possible downtrend between early 2025 and December 19, 2025. From February to April, ETH traded in a tight range and built strong support around the $2,000 level.

During this phase, price remained stable as buyers and sellers stayed balanced, creating a solid base for the move higher that followed.

In May, ETH broke out of this consolidation and moved upward, but soon ran into resistance. Price action slowed and began to move sideways again, showing hesitation among traders and increasing selling pressure as buyers struggled to push the price higher.

Between June and September, ETH experienced a strong bullish rally that carried the price toward the $5,000 resistance area. However, momentum faded near this level, and the chart formed a rounded top that peaked in early September.

The previous support within the uptrend failed, leading to a price decline.  Although there were minor rebound attempts, they were weak and failed to break previous highs, keeping the overall trend negative.

The RSI (14) indicator supports this view, as it moved below the 50 level, showing weakening buying momentum and a higher risk of further downside.

Currently, ETH trades around $2,957, just below a minor resistance area. If the key support near $2,800 breaks, ETH could continue falling and retest the previous major support zone around $1,000–$1,200.

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