Ethereum Stalls Near $2,500 After Short Squeeze as Markets Eye Fed Decision

Ethereum briefly climbed from approximately $2,437 to $2,667 on September 11, marking its first trade above the $2,600 threshold in roughly eight months before retreating to trade near $2,505. The upward move was sparked by the release of August US Consumer Price Index data, where headline inflation met expectations at 3.4% year-over-year while core inflation registered a slightly higher-than-expected 0.3% monthly rise.

The price action was largely driven by market positioning rather than purely macroeconomic data. An extensive short squeeze triggered roughly $665 million in total crypto liquidations over 24 hours, with short positions accounting for around $400 million. Ethereum saw approximately $250 million in liquidations, surpassing Bitcoin's $170 million. On-chain analyst Ali Martinez reported that Ethereum transactions exceeding $1 million increased by 14% during the session, indicating participation from large holders.

Despite the initial surge, Ethereum failed to sustain its breakout levels, closing the week near $2,619 before slipping beneath $2,500. Market attention has shifted toward the Federal Reserve's September 15–16 policy meeting, where futures and prediction markets reflect an 80% to 87% probability of a 25 basis point rate increase, supported by updated forecasts from Goldman Sachs and J.P. Morgan citing persistent energy costs.