Ethereum Price News: ETH On Track to Hit $1,400 as Exchange Inflows Keep Rising

Ethereum (ETH) has experienced a 7% price drop in the past 7 days as macroeconomic conditions have deteriorated.

The token lost the $1,600 level today, and whales seem to be positioning to dump a higher volume of tokens according to on-chain data.

Trading volumes rose by 30% in the past 24 hours, currently accounting for 9% of the asset’s circulating market cap.

Exchange Inflows Spike as Whales Position to Keep Dumping ETH

Exchange inflows have been rising since early May, indicating that token holders could be preparing to offload their ETH.

This could set the stage for the continuation of the current downtrend, as it anticipates an increase in the selling pressure over the next few days.

Typically, whales wait for the price to recover a bit before resuming their dump. In this case, we might expect ETH to rise to $1,700, at which point the downtrend should resume.

Investors have also been pulling funds out of exchange-traded funds (ETFs) for five days in a row. In total, $220 million has been withdrawn from these vehicles during this period.

The reason for this latest drop is a shift in macroeconomic conditions. According to the latest data from FedWatch, the odds of a 25 to 50bps rate increase in September have risen beyond 60%.

The new head of the U.S. Federal Reserve, Kevin Warsh, highlighted that inflation for the central bank is a “choice,” and the market interpreted this as a sign that he is willing to take the necessary steps (e.g., raise rates) to keep prices from spiraling out of control.

Last month, annualized inflation in the country rose to 4.2%, more than doubling the Fed’s target rate of 2%.

These are challenging macroeconomic conditions for risky assets, as investors typically rotate their capital to lower-risk instruments when rates are high. In addition, liquidity shrinks as the cost of financing increases.

Market sentiment confirms this sentiment shift, as the Crypto Fear and Greed Index currently sits at 16, meaning that investors are in “Extreme Fear” mode.

ETH Could Drop to $1,400 Shortly, But a Cycle Bottom Should be Near

Looking at the daily chart, we are seeing the result of a rejection of a move above $1,800 from last week.

This confirmed that sellers are still in control of the price action and increases the odds of a retest of the April 2025 lows of $1,400.

The Relative Strength Index (RSI) has dropped to 30, confirming a sell signal in the near term. Despite this latest setback, we still believe that we are either near or at this cycle’s bottom, and don’t expect a break below $1,400.

The reason for this is that ETH sent a historical buy signal in the weekly chart that has marked the end of previous bearish cycles quite accurately.

Although it is impossible to predict how low ETH could go, we see high odds that $1,400 will act as a floor for the price action, as the selling pressure eases and long liquidation at these levels is getting smaller.