Ethereum price analysis: 3 Reasons ETH Could Drop to $1,500 despite US CPI and PPI confirming easing inflation

Ethereum (ETH) price tumbled below $2,000 on Thursday as bulls failed to counter a wave of liquidations. This comes despite the latest US Producer Price Index (PPI) data confirming a continued slowdown in industrial inflation. With technical indicators flashing bearish signals and macroeconomic headwinds building, Ethereum now faces a critical test of investor confidence.

Why Is Ethereum Price Falling Despite Easing US Inflation?

Ethereum’s price action has remained fragile in recent months, with upward momentum struggling to gain traction. While the latest inflation reports fueled a broader market recovery, Ethereum has decoupled from the broader market recovery phase, pinned down by internal bearish catalysts.

On Wednesday, the US Consumer Price Index (CPI) data sparked optimism across risk assets, helping major cryptocurrencies like XRP, BNB, and PEPE break key resistance levels. The bullish sentiment extended into Thursday when the US Bureau of Labor Statistics confirmed that Producer Prices in the United States declined to 147.95 points in February from 147.98 points in January 2025.

Historically, a declining PPI suggests lower input costs for businesses, easing inflationary pressures and reinforcing expectations of a dovish pivot from the Federal Reserve. This typically encourages risk-on sentiment, boosting assets like Ethereum. However, ETH price has failed to capitalize on the broader market optimism.

Ethereum Plunges 35% in 3 weeks Losing Key Support

Despite easing inflation signals, Ethereum recorded its third consecutive daily decline this week. At press time, ETH had fallen to $1,850, marking a 3% drop on Thursday alone. The downward trend accelerated after ETH plunged from $2,819 on Tuesday to a low of $1,759 on Thursday, a staggering 35% decline in 48 hours.

Zooming out, historical data shows that ETH price has not registered three consecutive weeks of gains since early December 2024. This prolonged weakness suggests an underlying shift in market sentiment, independent of macroeconomic data.

2. Ethereum Foundation Leadership Shuffle and Network Updates Weigh on Sentiment

Ethereum’s recent losses align with internal structural shifts that have unsettled investors. A leadership shake-up at the Ethereum Foundation, coupled with network upgrade uncertainties, has added to bearish sentiment. These developments suggest ETH has decoupled from broader market trends, charting an independent downward trajectory.

At the same time, growing competition in the altcoin market has further eroded Ethereum’s dominance. Emerging layer-1 blockchains and increasing capital inflows into Solana, Avalanche, and alternative DeFi ecosystems have siphoned liquidity away from Ethereum-based DeFi applications.

2. Hawkish Fed Outlook and Rising ETH Market Supply Weigh on Staking Demand

Before this week’s CPI and PPI reports hinted at easing inflation, Ethereum’s price action had already been under pressure from rising Treasury yields and a hawkish Federal Reserve outlook. Friday’s upcoming Non-Farm Payrolls (NFP) report has fueled additional concerns, as stronger-than-expected labor market data could reinforce the case for prolonged high interest rates.

Higher interest rates have direct implications for Ethereum’s DeFi sector. With risk-free yields on US Treasuries remaining attractive, investors are reallocating capital away from Ethereum-based staking and yield-bearing protocols. This shift has lowered demand for ETH staking, further pressuring price action.

As more investors lean toward external yield markets, Ethereum price could remain vulnerable in the near term, with the next key support level sitting near $1,500. If bulls fail to defend this zone, ETH could face further declines, prolonging its underperformance relative to the broader crypto market.

3. Ethereum Price Forecast: Fresh Death Cross signal hints at Reversal to $1,500

Ethereum price forecast indicators remains decisively bearish, with the weekly chart signalling a continuation of the ongoing downtrend. ETH has plunged 35% in just two weeks, breaking below key moving averages and testing multi-month lows. With downside momentum accelerating, Ethereum now risks further declines toward the $1,500 mark.

The weekly candlestick structure confirms sustained selling pressure, with consecutive large-bodied red candles suggesting a lack of meaningful dip-buying interest. Ethereum has lost the 200-day EMA at $2,066, an essential long-term support level.

The MACD histogram extends deeper into negative territory, reinforcing bearish momentum as its signal line diverges downward. If ETH fails to reclaim the $2,272 resistance, sellers could push prices lower.

Despite the bearish setup, bulls may attempt to defend the $1,844 level, where demand previously emerged. A relief rally above this zone could target the $2,662 resistance, aligning with the 50-day EMA. However, the downward trajectory of the moving averages suggests that any short-term rebound may face rejection.

Failure to establish a base above $1,844 would validate the bearish breakdown, opening the door to $1,500 as the next major support. With momentum indicators pointing to continued weakness, Ethereum remains vulnerable to further downside.