Ether (ETH) fell on Thursday after a up-to-date knee-jerk reaction to yesterday’s US interest rate decision and higher inflation prospects.

Key takeaways:

• ETH fell 7% to $2,100 on Thursday, wiping out $144 million in long positions.

• A break below $2,000 could result in more than $2.5 billion in additional long liquidations on exchanges.

• The key level to watch is the 50-day moving average near $2,100.

Ether faces $2.5 billion liquidation

Data from TradingView showed a 7% daily drop in ETH prices, with ETH/USD falling to $2,140 on Thursday.

Ether’s correction is accompanied by significant long liquidations in the cryptocurrency market totaling $492.8 million in the last 24 hours. Over $144 million in long ETH positions were liquidated as the Ether price rose to $2,100.

The correction occurred despite another purchase of 60,999 ETH by Tom Lee Bitmine Immersion Technologies, which currently holds approximately 4.6 million ETH, or 3.81% of the total supply.

Related: Data on ether accumulation indicate an escalate towards 2.8 thousand. dollars, but there is a catch

According to data from Farside Investors, Ether’s price decline comes amid fresh selling in U.S. ETH spot funds (ETFs), which recorded net outflows of more than $55.5 million on Wednesday, breaking a six-day streak of inflows.

Ether’s downside momentum may escalate if spot and institutional buyers do not return soon.

Ether’s downside may hinge on key $2,000 support as the correction below would trigger over $2.5 billion in leveraged long liquidations across all exchanges, CoinGlass data shows.

This means that a significant number of bullish bets would be wiped out in a move down, leaving ETH vulnerable to a sharper downside cascade if bearish momentum continues.

ETH price remains sensitive to FOMC risk

Today’s bearish trend in the Ether market follows the decision of the US Federal Open Market Committee (FOMC) to leave interest rates unchanged after its March 18 meeting.

The chart below shows that ETH/USD has fallen after seven of the last eight FOMC meetings, establishing one of the purest macroeconomically driven fractals in its history.

ETH has set a consistent pattern of stabilizing or rising ahead of the meeting, then correcting sharply once the decision and accompanying commentary hit the news.

Typical post-FOMC price drops ranged from 16% to 23%, while deeper deleveraging phases resulted in ETH price declines of up to 33%-43%.

From a technical perspective, Ether remains cautious despite macroeconomic risks. The price is retesting the key support zone near $2,100, which coincides with the upper trendline of the ascending triangle and the 50-day uncomplicated moving average (SMA).

Bulls need to keep ETH above this level to regain balance. This will then open the way to the next major resistance at $2,575, which is the 100-day SMA.

Higher up, the price could move higher towards the triangle’s measured target of $2,700, which is 24% above the current price.

Conversely, failure to sustain above $2,100 would weaken the setup, pushing ETH/USD back toward the triangle support line near $2,000 while also threatening the broader recovery.

As Cointelegraph reports, a close below the 20-day exponential moving average near $2,000 would suggest that the bears are back in control, risking a deeper correction towards the next major support area near $1,800.