Ethereum Price News: Early Rejection of $1,800 Raises Odds of 18% Drop

Ethereum (ETH) has managed to recover by 4% in the past 7 days, as the crypto market experienced a technical bounce.

However, sentiment readings are still heavily depressed as macroeconomic conditions have worsened.

Last week, the new head of the Federal Reserve commented on inflation in a way that hinted at an upcoming interest rate hike.

By saying that inflation is a “choice” for the Fed, Kevin Warsh acknowledged that he sees monetary policy as the most effective tool to keep prices from spiraling out of control.

This triggered a strong drop across the crypto market and could set the stage for a stronger downturn, as this looks like a replay of the 2021-2022 scenario that ultimately tanked cryptocurrencies.

In addition, it marked a significant shift from the dominant view earlier in the year, as analysts expected one to two rate cuts from the Fed.

However, with inflation more than doubling the central bank’s target, these expectations are no longer realistic, and that means we are in a hostile environment for risky assets like cryptocurrencies.

ETH Could Soon Retest Its April 2025 Lows

For Ethereum, last week’s setback coincided with a rejection of a move above $1,800, which is a former support area that has now turned into resistance.

The most likely landing zone if the selling pressure continues would be the April 2025 low of $1,400. This means an 18% downside risk for ETH at a point when the token is sitting at a yearly loss of 43%.

ETH is now the worst-performing token of the top 5, outpacing Solana even. Something similar occurred in April 2025. Back then, it was the release of the Pectra upgrade that helped Ethereum make a comeback.

What could save Ethereum this time? Probably contrarian guidance from the Fed. However, as Warsh decided not to provide any guidance in terms of rates for the future, the market is kind of flying blind, and that could introduce some unnecessary volatility and make it more difficult for ETH to recover.

RSI Is About to Send a Strong Sell Signal

From a technical standpoint, ETH is still coming out of oversold territory in the Relative Strength Index (RSI). The oscillator is currently sitting at 40, meaning that it is just inches away from confirming a sell signal.

Unless we break past $1,800 this week, we expect a decline to $1,400 over the next few days.

Even though this is a gloomy scenario, we believe that we could be either near or already at the token’s cycle bottom based on ETH’s historical pattern. We don’t see it dropping below $1,400 as macroeconomic conditions are not bad enough to justify a retest of $1,000.

The end of the war with Iran is encouraging, as it removes the pressure on prices and may allow the Fed to postpone a rate hike. Hence, a drop to $1,400 would not be such a bad thing if you are bullish in the long term, as it would provide a much lower entry for long positions.