NEW YORK, August 14, 2024 - Ethereum (ETH) dropped 1.7% on Wednesday, despite low Consumer Price Index (CPI) inflation data and rising ETH ETF inflows, which suggest a potential rally could be imminent. However, a key trendline indicates ETH might consolidate for a few weeks before initiating a new upward movement.

The US Consumer Price Index (CPI) decreased to 2.9% year-over-year, slightly below the expected 3.0%, according to the Bureau of Labor Statistics (BLS). This decline has increased the likelihood of the Federal Reserve cutting interest rates by 25 basis points, with the probability now at 56.5% on the CME.

Lower interest rates typically benefit risk assets like cryptocurrencies, which could lead to a recovery for Ethereum in the coming weeks.

On the ETF front, Ethereum ETFs saw net inflows of $24.3 million on Tuesday, marking the second consecutive day of positive movement. BlackRock’s ETHA led the inflows with $49.1 million, bringing its total since launch to $950.2 million. Fidelity’s FETH also gained $5.4 million in inflows, while Grayscale’s ETHE continued to struggle, recording $31 million in outflows and extending its cumulative outflows to $2.32 billion.

Crypto community sentiment suggests Ethereum could rally in the coming weeks if the Federal Reserve cuts rates and ETH ETF inflows persist.

However, there are concerns that Jump Trading might resume selling off Ethereum, after claiming 17,049 ETH worth $46.44 million from staking protocol Lido Finance, as per Lookonchain’s data. The trading firm still holds $148 million worth of ETH across Lido Finance and another wallet, after reportedly dumping over $400 million worth of ETH on August 2.