Ethereum Eyes $1,866 as CPI Cools to 2.4% – Shorts Still in Control?

• US January CPI slowed to 2.4% YoY, beating 2.5% forecast as energy prices fell 1.5% month over month.
• Core CPI rose 0.3% MoM and held at 2.5% YoY, matching estimates amid easing car and food prices.
• Ethereum trades near $1,896, below $2,001 resistance, with $1,866 eyed as a key downside target.

Ethereum traded near $1,896 after a recent decline and modest rebound, while new U.S. inflation data showed further cooling in January. The softer Consumer Price Index reading supported risk assets in early trading, and Bitcoin briefly moved toward $69,000.

However, Ethereum remains below key resistance, and traders continue to assess whether the broader bearish trend remains intact despite improving macro conditions.

Ethereum Price Structure Keeps Bears Focused on $1,866

Ethereum rebounded from the $1,896 area, yet price action continues to respect a descending structure on higher timeframes. The $2,001 H1 swing high is being tracked as a technical invalidation level. A sustained move above that zone could force short covering and shift short-term positioning.

On the downside, the $1,924 level is viewed as near-term support. A confirmed hourly break below that low may signal continuation toward deeper liquidity levels. Some traders are also watching lower timeframes for a market structure break after any short-term rally.

The $1,866 level remains a key downside target in current setups. That area represents a liquidity objective based on recent price behavior. While inflation data supported broader markets, Ethereum has yet to reclaim resistance levels that would alter the prevailing trend.

January CPI Cools to 2.4% as Energy Prices Fall

The January 2026 CPI report showed headline inflation rose 0.2% month over month, below the 0.3% consensus forecast. On an annual basis, headline inflation slowed to 2.4%, down from 2.7% in the prior reading. The moderation was driven in part by a 1.5% decline in energy prices.

Core CPI, which excludes food and energy, increased 0.3% on the month and stood at 2.5% year over year. Shelter costs rose 0.2%, which was lower than many recent monthly gains. Used vehicle prices fell 1.8%, while new vehicle prices edged up 0.1%.

Food categories also showed easing pressures. Egg prices dropped 7% during the month, and beef and veal prices declined 0.4%. Treasury yields moved lower after the release, with two-year yields falling several basis points, while stock futures remained relatively steady in early trading.

Market Reaction and Fed Policy Expectations

Crypto markets reacted positively following the CPI release, with Bitcoin approaching $69,000 and Ethereum stabilizing after its earlier decline. Even so, traders noted that the data was released near the end of the week, and attention is now shifting to how markets close and position into the next cycle.

Rate cut expectations for the Federal Reserve remain limited for March. Market pricing indicates roughly a 7% to 8% probability of a rate reduction at the March 18 meeting. Odds for a June cut increased modestly after the softer inflation reading.

Bloomberg Economics analysts Anna Wong and Troy Durie wrote, “Core CPI was substantially cooler than in past years.” They added that disinflationary forces in cars, food, and energy may dominate in the coming months. At the same time, other areas such as recreational goods and services remain firm, leaving markets attentive to future data and policy signals.

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