Why Is Ethereum Falling? ETH Price Drops as Fed Rate Hike Odds Rise

Ethereum price dropped nearly 2.10% on Friday after a surprise US jobs report changed how traders think about the Federal Reserve's next move. The token slid from its recent highs near $2,550 back down toward the $2,450 zone.

ETH is currently trading at $2,455.55, down 2.22% on the day. The pullback came fast, and it followed a jobs number that nobody was expecting.

Why did Ethereum price drop today?

Non-farm payrolls rose by 162,000 in August. That number beat every single forecast in a Bloomberg survey of economists.

Unemployment held steady at 4.1%. Strong jobs data usually means the Fed has less reason to cut rates, and that pushed bond yields and the dollar higher.

Crypto felt it right away. When yields rise, riskier assets like Ethereum often get sold off first.

What are the Fed rate hike odds for September 2026?

The jobs report shifted the odds in a big way. Markets now price a 59.4% chance of a rate hike at the September 16-17 FOMC meeting, versus 40.6% for no change.

That is a sharp jump. Hike odds sat at just 49.4% one day earlier and 43.0% one week earlier.

A hike would push the target range from 350-375 bps to 375-400 bps. This comes at an odd moment, since new Fed Chair Warsh was appointed by President Trump under the condition that he would cut rates, not raise them.

How is Trump's trade threat affecting Ethereum ahead of September 16?

Things got more tense this week. President Trump has threatened to "stop trading" with any country that runs a trade surplus with the US if the Fed does not cut rates.

That threat could touch roughly half of all US trading partners, including Mexico, China, Taiwan, Germany, Japan, South Korea, Canada, and India. Trump claims the Supreme Court has ruled he has an "absolute right" to take this step.

If the Fed holds rates steady or hikes on September 16, more than $300 billion in monthly US trade volume could reportedly be affected.

On top of that, the US House has cancelled the final two weeks of its September session. That means the Clarity Act, a bill crypto traders have been watching closely, could face another delay.

Are Ethereum ETF inflows still positive today?

Even with the price drop, ETF demand has not disappeared. Spot Ethereum ETFs saw $26.46 million in net inflows, according to SoSoValue data.

BlackRock's ETHA led with $57.79 million in inflows. Fidelity's FETH, on the other hand, posted $48.30 million in net outflows.

The Fear & Greed Index sits at 73, still in Greed territory, though slightly down from 74 the day before.

What does Ethereum derivatives data show right now?

Futures volume over 24 hours came in at $38.98 billion, and open interest sits at $32.32 billion. Both are declining.

Options activity tells a different story. Options volume is up 7.44%, and options open interest rose 4.42%, suggesting some traders are hedging rather than exiting.

Liquidations hit $102.54 million over the past 24 hours, with long positions taking the bigger hit.

What is the Ethereum price prediction for this week?

Looking at the ETH/USDT 4-hour chart, Ethereum is consolidating after a sharp upward move earlier in the month.

Price keeps finding support around $2,350 to $2,400, while resistance sits near $2,500 to $2,550. That has created a clear sideways range.

The recent rejection near the top of that range shows buyers still can't force a clean breakout. Still, the structure stays cautiously bullish as long as ETH holds above $2,350.

A close above $2,550 on the 4-hour chart could open the door toward $2,600 to $2,700. A break below $2,350 could send price back toward the $2,250 to $2,200 area.

For now, sideways movement looks like the most likely path, with $2,550 as the level to watch for any real breakout confirmation.

Disclaimer

This article is for informational purposes only and should not be taken as financial or investment advice. Cryptocurrency markets are highly volatile, and prices can change rapidly. Always do your own research and consult a licensed financial advisor before making any investment decisions.