If ETH falls below $2,100, Ethereum faces a $2.5B long liquidity risk.

Ether (ETH) fell on Thursday after a fresh knee-jerk reaction to yesterday's US interest rate decision and a higher inflation outlook.

Main Receptors:

ETH fell 7% to $2,100 on Thursday, which is $144 million in long-term losses.

A break below $2,000 could trigger additional long liquidity transactions of more than $2.5 billion.

The 50-day moving average is a key level seen around $2,100.

Ether risks $2.5 billion in long liquidity

Data from TradingView showed a 7% intraday ETH price loss, with ETH/USD down to $2,140 on Thursday.

Ether's correction comes with significant long liquidity in the crypto market, with $492.8 million in the past 24 hours. More than $144 million in long ETH positions were wiped out by Ether's move to $2,100.

Although the correction was caused by Tom Lee's purchase of 60,999-ETH of Bitmin Immersion Technologies, it now holds approximately 4.6 million ETH or 3.81% of the total supply.

Related: Ether stock data points to $2.8k rally, but there's a catch

Ether's decline came amid fresh selling of US-based spot ETH exchange-traded funds (ETFs), which saw a net inflow of more than $55.5 million on Wednesday, snapping a six-day streak of outflows, according to Farside Investors data.

If space and institutional buyers don't step back soon, Ether's downward trajectory may accelerate.

Ether's fall could hinge on key $2,000 support, as a correction below would trigger more than $2.5 billion worth of long liquidity used on all exchanges, according to CoinGlass data.

This means that a significant amount of bullish bets are lost on the downside, meaning that ETH is vulnerable to sharper downside risks if bearish momentum takes hold.

ETH price remains sensitive to FOMC concerns

Ether's bearishness follows today's decision by the US Federal Open Market Committee (FOMC) to leave interest rates unchanged after March 18.

The chart below shows that the ETH/USD pair has declined after seven of the last eight FOMC meetings, one of the clearest macro-driven fractals in its history.

ETH has developed a consistent pattern of settling or rallying ahead of the meeting, then correcting sharply as the decision and accompanying comments hit the news wires.

Typical post-FOMC cuts are between 16% and 23%, while deep transmission levels have pushed ETH price losses to 33%-43%.

From a technical perspective, Ether is swinging cautiously despite macro risks. The price is testing a key support zone near $2,100, which corresponds to the upward triangle line and the 50-day simple moving average (SMA).

Bulls need to hold ETH above this level to regain their footing. It then opens the way to the next major resistance at $2,575 where the 100-day SMA is located.

Higher than that, the price could rise to the target of the triangle measured at $2,700, which is 24% above the current price.

Conversely, failure to hold above $2,100 will weaken the setup, pushing ETH/USD towards the triangle support line around $2,000, threatening a broader recovery.

According to Cointelegraph, a close below the 20-day exponential moving average around $2,000 suggests that the bears will experience a deeper correction towards the key support area around $1,800.