Ethereum saw a sharp decline this week, falling to as low as $1,814 on Bitstamp in its lowest level since early February. The price drop has put the spotlight on the $1,800 threshold, with market participants closely monitoring whether Ethereum can stay above this level. Analysts believe this support could be crucial for determining the short-term direction of ETH.
Why is the $1,800 level so important?
Market analysts, including Ted Pillows, have emphasized that $1,800 represents the final major support area before new potential lows for Ethereum. Technical assessments warn that a clear break below this zone could bring the $1,700 mark and possibly lower levels into play.
Ted Pillows noted that Ethereum approached the $1,800 zone during the day and described it as the last support level before any new lows are established.
Similar caution has been echoed by other commentators. CrypDoMillions suggested that losing the $1,800 support could drag the price down to the $1,600 range, while BitFrog remarked that this area now looks weak. In addition, the daily Relative Strength Index (RSI) has dropped to 21, highlighting a sharp increase in selling pressure. While such indicators occasionally encourage rebound buying, the current environment remains under clear selling stress.
Mini glossary: The RSI, or Relative Strength Index, is a technical indicator measuring the speed and strength of price movements. Values below 30 are seen as oversold, while figures above 70 indicate overbought conditions.
ETF outflows and weak US demand take center stage
The institutional landscape also looks fragile. Spot Ethereum ETFs have witnessed uninterrupted outflows for 16 consecutive trading days, marking the longest withdrawal streak since their launch in July 2024. According to data from SoSoValue, these outflows have totaled $847 million during this period.
Attention has also turned to the Coinbase Premium Index, which tracks the price difference between Ethereum on Coinbase and Binance, as an indicator of US-based demand. On May 28, the index dropped to minus 0.16, signaling that American investors were selling at lower prices compared to global platforms. Analyst Inoms has highlighted that US demand continues to remain subdued.
Mini glossary: The Coinbase Premium Index measures the price gap between Coinbase and Binance. If negative, it is often interpreted as weak US demand or elevated selling pressure in the US market.
Long-term holders start to move
On-chain data reveals that selling pressure is not limited to short-term traders. The ETH Age Consumed metric, which tracks the movement of long-dormant tokens, has surged in the past 48 hours, indicating that older investors have begun transferring their holdings.
A large portion of these transactions were reportedly closed at a loss. Persistent losses since April suggest many holders have been selling into weakness. Globally, Ethereum-focused investment products saw $257 million in outflows last week alone.
Risky divergence spotted in derivative markets
In the derivatives market, open interest remains above 15 million ETH, while funding rates are staying positive. CryptoQuant analyst Arab Chain has warned that such relatively optimistic positioning, despite falling prices, could lead to forced liquidations. Continued selling pressure could make heavily leveraged long positions susceptible to a sudden unwinding.
Glassnode data indicates that between $1,800 and $1,250, there is little proven demand support. If selling persists, the market may only find significant backing near $1,200. On the technical side, Ethereum is also trading below its 20, 50, and 100-day exponential moving averages, with other support levels to watch at $1,740, $1,524, and $1,404.
