Ethereum Price Forecast – Ether Eyes $1600 as Intraday Support Is Broken

Highlights:

• Ethereum is headed lower after bears breach the $1790.9 support
• Breach of support puts $1600 in focus for Ethereum in the short term
• Uncertainty around the upcoming FOMC decision could drive bearish sentiment

Mirroring the broader outlook of the cryptocurrency market, Ethereum has fallen today, continuing the weak price action witnessed on Monday, May 5. This weakness comes ahead of a critical announcement from the Federal Reserve. 

As the Federal Open Market Committee (FOMC) prepares to share its latest policy statement on May 7, investors are taking a break from high-risk assets like cryptocurrencies. Ethereum was trading at $1,798.04 when going to press, reflecting a 1.64% decline over the day.

Pectra Upgrade Anticipated to Improve Ethereum Network Utility

Regardless, Ethereum may see some movement soon as a result of the eagerly awaited Pectra upgrade. This upgrade, scheduled for May 07, 2025, aims to bolster the network’s scalability and validator performance and is expected to address two major issues critical for long-term growth and adoption.

You've probably been hearing about the Pectra Upgrade on @ethereum over the past few days, that's because it's scheduled to go live tomorrow, May 7, 2025, at epoch 364032.
But what is the Pectra Upgrade?

Combines two major upgrades: Prague (execution layer) and Electra… pic.twitter.com/WzzykAFSpR

— Zerachielo (@zera_chielo) May 6, 2025

One of the most important additional components, EIP-7251, aims to increase the staking cap from 32 ETH to 2,048 ETH. Such a decision will undoubtedly enhance the operational efficiency of validators, increase the ease of participation in the staking process, and thus draw greater institutional interest in the Ethereum consensus layer.

Apart from the enhancements in staking, the Pectra upgrade brings along a new set of wallet features to improve the user experience. Simplified wallet recovery processes and gasless transactions are some features that could increase user and developer onboarding and drive Decentralized applications (dApps) on the Ethereum network.

Ether Whale Activity Shows Signs of Stagnation

However, in the short term, on-chain data points to possible weakness, with or without the FOMC rate decision. One alarming issue is the stagnation of Ethereum whale accounts, which are wallets between 1,000 and 10,000 ETH. The current figure is 5,463, which has not shown meaningful increases in the past few weeks.

Analysts closely monitor whale activity, which often provides insight into broader market trends. Increasing whale numbers are usually taken as a positive expectation for the market, alongside a sustained accumulation period, while stalling growth tends to signal uncertainty or distribution. The stagnation in the whale count has led some investors to remain cautious about Ethereum’s near-term outlook.

BTCFi Emerges as a Growing Competitive Threat to Ethereum

The rise of the decentralized finance ecosystem for Bitcoin referred to as BTCFi, adds to Ethereum’s competitive pressures. While still nascent, this newly emerging sector is already attracting growing interest and funding.

BITCOINFI

Ethereum DeFi? Old news…

The next wave of DeFi will not just be cross-chain, it’ll be Bitcoin-native.

Here’s what BitcoinFi is and why it matters:

Thread pic.twitter.com/5anBqLeX11

— Wise ink (@Eme_diongg) May 5, 2025

Pantera Capital, an American-based hedge fund, recently commented that if widely adopted, BTCFi might unlock as much as $500 billion in value. Such potential has fueled comparisons to Ethereum’s dominance in DeFi, raising the question of whether Bitcoin would encroach on one of Ethereum’s core markets.

One of the BTCFi endeavors trying to solve the problem of providing yield-earning opportunities for Bitcoin holders is the Solv Protocol. Solv has over $2 billion in total value locked and is trying to achieve what Lido did for Ethereum: widespread adoption of staking on Ethereum.

Technical Analysis – Ether Bears Breach Critical Support

Ethereum bears appear to be taking control intraday. On the one-hour chart, they have breached the $1790.9 support and closed below it. If bears sustain this momentum, a correction to $1600 could follow. 

Recap

Ether will most likely respond to macroeconomic factors, technical milestones, and new competition in its defined market. The Ethereum ecosystem, with all its moving parts, might find critical weeks ahead that will set its market stance for the rest of the year. In the short term, the upcoming FOMC interest rate decision could determine Ethereum’s trajectory.