Ethereum Price Poised to Plunge: Could $1,800 Be Next?

On Wednesday, Ethereum’s value faced downward pressure as weakening technical signs, escalating Treasury yields, and ongoing ETF withdrawals prompted traders to scrutinize whether the second-largest cryptocurrency can sustain its vital psychological support level of $2,000.

As of the latest update, Ethereum (ETH) was trading near $2,129, down approximately 12% from its recent peak close to $2,420. This drop follows a decline in risk appetite across the crypto landscape, triggered by another increase in U.S. bond yields and renewed fears regarding slowing economic growth globally. Bitcoin also dropped below short-term support levels, negatively impacting most major altcoins.

The sell-off intensified after U.S. 10-year Treasury yields rose to 4.58%, marking their highest level in several months due to inflation data that came in higher than expected. Higher yields generally decrease the appeal of speculative assets like cryptocurrencies, as investors seek better returns from safer government bonds.

Market sentiment has been further dampened by escalating global tariff tensions, stemming from a 15% global tariff plan implemented by the U.S. earlier this quarter. Investors are increasingly opting for defensive strategies amid concerns that increased trade barriers could hinder economic growth and put pressure on tech and crypto valuations.

Ethereum has been especially vulnerable, given its strong historical ties to the Nasdaq and other tech stocks sensitive to growth trends. The recent downturn in AI and semiconductor shares has coincided with a weaker performance among major altcoins, as traders reduce their exposure to high-risk assets.

The demand from institutional investors has also decreased. U.S.-listed spot Ethereum ETFs have experienced persistent net outflows recently, leading to a lack of buy-side liquidity in the market. Many funds have encountered consecutive redemptions as investors pivot toward Bitcoin ETFs and fixed-income options.

Analysts have increasingly pointed to waning Ethereum ETF demand as a result of the lack of native staking rewards in approved U.S. products. The absence of yield generation prompts many institutions to prefer Bitcoin over Ethereum, despite ETH’s greater upside volatility potential.

“Ethereum ETFs still lack the inherent yield advantage that many institutions anticipated,” commented BitMEX co-founder Arthur Hayes in a recent discussion regarding market trends. “Until these products incorporate staking, capital flow will disproportionately favor Bitcoin.”

On-chain analytics indicate declining confidence among large holders. According to Glassnode data shared by market analysts this week, the number of wallets containing over 10,000 ETH has dropped to its lowest level in almost ten months. Phases of whale distribution can increase upward pressure, as large holders start to liquidate supply during periods of waning momentum.

Exchange flow data raises additional bearish flags. Recent net ETH inflows to centralized exchanges have surged to their highest levels since early 2025, suggesting that more investors could be preparing to sell or hedge their positions. Rising exchange balances typically heighten short-term market supply and can exacerbate volatility during panic selling.

What is causing Ethereum’s descent from its upward channel?

Technical analysis suggests that Ethereum may be entering a crucial bearish phase after losing support from a long-term upward channel visible on the daily chart.

The chart illustrates ETH dipping below the lower boundary of its ascending channel after multiple attempts to regain resistance in the $2,280 to $2,320 range. This breakdown coincides with the price falling below the 20-day exponential moving average, indicating a substantial decline in short-term bullish momentum.

Momentum indicators are also showing decline. The MACD histogram has turned negative while the MACD line crosses below the signal line, confirming increasing bearish momentum on the daily chart. Previous bearish crossovers at this chart structure earlier this year led to considerable downward movements.

The immediate support level is now around $2,080. A failure to maintain this level could result in Ethereum rapidly moving toward the $1,800 region, coinciding with prior consolidation support seen in March and April.

Some technical analysts have warned that Ethereum is now trading below several significant exponential moving averages, which further increases the likelihood of additional declines. A confirmed daily close beneath the channel support could compromise the entire recovery structure from April.

Derivatives positioning adds another layer of risk. CoinGlass liquidation data shows a significant concentration of leveraged long positions sitting between $2,040 and $2,000. If Ethereum decisively breaks below this zone, forced liquidations could amplify downward volatility.

Estimates from CoinGlass show that more than $1.70 billion in leveraged long positions could be at risk of liquidation if ETH drops below approximately $2,044. Such liquidation cascades often lead to rapid flash crashes when exchanges automatically liquidate overleveraged positions in a declining market.

Funding rates across multiple major perpetual futures exchanges are beginning to turn negative, signaling a growing bearish sentiment among derivatives traders. Negative funding rates typically indicate that short sellers are becoming more aggressive while bullish positioning deteriorates.

Open interest has also declined from recent highs, suggesting that traders are pulling back from exposure rather than actively buying the dip. A fall in open interest during price declines often points toward waning market confidence and decreased speculative demand.

What could change the bearish outlook for Ethereum?

Despite the deteriorating technical conditions, several factors could still prevent Ethereum from tumbling below the $1,800 mark.

A resurgence in spot ETF demand could swiftly bolster market sentiment. Institutional inflows have historically aided in stabilizing ETH during prior corrections, especially when subscription activity for BlackRock and Fidelity products surged.

Cooling inflation data could alleviate the pressure on risk assets. Softer readings for U.S. PCE or CPI may help lower Treasury yields and reignite expectations for rate cuts from the Federal Reserve later this year. Reduced yields typically enhance liquidity conditions in speculative markets, including cryptocurrencies.

Geopolitical developments also play a vital role. Oil prices have recently stabilized following renewed diplomatic discussions concerning Middle Eastern trade corridors and shipping routes. A significant drop in crude prices could enhance global risk sentiment and lessen inflation worries that have been pressuring crypto markets.

To counter the immediate bearish scenario, Ethereum needs to reclaim resistance in the $2,230 to $2,280 range. A successful recovery above the previously broken channel support could entrap short sellers and potentially lead to a rally toward the $2,500 region.

Crypto trader Michaël van de Poppe recently stated that Ethereum still has long-term growth potential, despite its current weaknesses. “As long as ETH remains above the macro support level, the bullish cycle framework stays intact,” he mentioned in a market update shared on X.

For the time being, however, momentum is skewed towards the bearish side. Unless Ethereum quickly regains lost support levels and macro conditions show improvement, traders might continue positioning themselves for a deeper correction towards the $1,800 level in the upcoming sessions.