Ethereum Price News: Thin Volumes Could Send ETH to Either $1.4K or $2.4K

Ethereum (ETH) is the second-worst performing token in the top 5 for 2026, as it has accumulated a 44% drop during this tough bear market.

Even though investors initially piled into the token as part of a flight-to-quality move, investors’ interest in altcoins has weakened as a result of rising geopolitical tensions and deteriorating macroeconomic conditions.

Market analysts now envision a rate cut in 2026, implying a significant shift in the macro backdrop, as participants initially expected one or two rate cuts this year.

The primary reason for this shift in expectations is rapidly rising inflation in the United States. Last month, the Consumer Price Index (CPI) registered a 4.2% 12-month jump, as higher energy costs are putting pressure on price stability.

This is twice the Fed’s target rate, even though the central bank uses another metric – the PCE Price Index – to measure how prices behave over time.

Nonetheless, this sounded the alarm across the market and prompted a significant risk-off move that pushed ETH down to $1,600 at some point.

The token has recovered over the past few days, but bearish sentiment continues to be strong.

Ethereum Volumes Drop Sharply, Setting the Stage for an Explosive Move

Looking at on-chain data, monthly active users (DAUs) in the Ethereum blockchain have dropped dramatically since the year started.

Ethereum closed last month with 510,000 active users, down 38% compared to the end of December last year. This reflects lower network usage and results in lower application fees for top protocols.

Meanwhile, data from Santiment also shows that trading volumes have dropped significantly in the past few weeks, to their lowest levels since September 2024.

We track the relationship between the 7-day and 30-day EMA for volumes, as bullish and bearish crossovers of these two lines tend to be good predictors of where ETH is heading next.

Right now, the two lines have diverged significantly from each other, and both are on a freefall. This indicates that ETH’s volumes are quite thin, which could set the stage for the next explosive moves.

When volumes are low, deep-pocketed participants can manipulate the price more easily to squeeze either bulls or bears and trigger the next big move. Right now, we need ETH to break decisively below $1,600 to confirm that we are heading to $1,400.

In contrast, if the price recaptures the $1,800 mark, we may see ETH recovering strongly to $2,400 as short positions will progressively get blown up, especially if we move past $2K.

ETH Could Either Rally to $2.4K or Drop to $1.4K

Heading to the daily chart, ETH is coming out of oversold territory in the Relative Strength Index (RSI). This creates the perfect scenario for a technical bounce. However, as volumes are thin, bulls could take advantage of the move to prompt a strong rally.

Macroeconomic conditions favor a bearish outlook at the time. However, the next Fed meeting will be critical to determine the market’s next moves.

If the U.S. central bank fully discards the possibility of a rate increase, that could drive a strong recovery across the crypto space. On the other hand, if they confirm a hawkish stance as a result of higher inflation, we may see ETH dropping to $1,400 rapidly… Or even lower.