Ethereum (ETH) has fallen below the pivotal $3,700 support level, posting a near 7% loss this week as market uncertainty increases in response to US President Donald Trump’s new retaliatory tariffs and the Federal Reserve’s hawkish pause. In spite of the risk-off mood and diminishing short-term bullish momentum, on-chain evidence shows that institutional investors and whale wallets are still buying ETH, indicating strong long-term conviction. As geopolitical tensions escalate and the Fed postpones rate cuts, Ethereum comes under pressure, although historical precedent and ETF inflows indicate prospects of a recovery should market conditions normalize.

KEY LOOKOUTS

• Should the existing downtrend be sustained, ETH could test the psychological floor around $3,500.

• ETF inflows and whale wallets indicate long-term bullishness, even as short-term volatility takes place.

• Trump’s recent reinstatement of reciprocal tariffs and continued trade tensions may make market sentiment risk-averse.

• Market participants keep a close eye on Fed rate decisions and comments, particularly with expectations of September rate cuts falling below 50%.

Ethereum’s recent price fall below the $3,700 level indicates increasing investor conservatism in the face of global economic tensions. The pairing of Trump’s newly declared reciprocal tariffs and the Federal Reserve’s stiff refusal to cut current interest rates has driven risk-off sentiment throughout markets. As such, ETH has lost close to 7% this week, and technical gauges indicate declining bullish momentum. But solid whale wallet accumulation and steady inflows into Ethereum ETFs imply underlying faith in the asset’s long-term prospects, presenting a mixed but interesting picture for August.

Ethereum falls below $3,700 as market mood becomes risk-off on new tariffs and the Fed’s hawkish stance. Institutional buyers are still adding ETH despite near-term weakness, which implies long-term faith. Critical support at $3,500 might be the next level to observe.

• Ethereum falls below $3,700, recording a nearly 7% weekly decline in the face of growing macroeconomic fears.

• Trump’s recent reciprocal tariffs against international trade partners increase geopolitical tensions and investor wariness.

• Federal Reserve leaves interest rates unchanged, without any decisive commitment to a September rate cut, putting pressure on risk assets.

• September rate cut probabilities drop from 60% to 43% after Fed meeting, undercutting market enthusiasm.

• Whale wallets accumulate over 790,000 ETH since July 9, indicating strong long-term investor interest.

• Ethereum ETFs see continued inflows, with over $5.4 billion in July alone — the highest since launch.

• Technical indicators turn bearish, with RSI moving downward and MACD signaling a potential continued decline.

Ethereum’s recent price action comes amid heightened geopolitical and economic tension, largely driven by U.S. President Donald Trump’s aggressive trade policies. The pronouncement of broad new reciprocal tariffs on nations such as Brazil, Switzerland, and assorted Southeast Asian countries has heightened global trade jitters. This, in addition to doubt over current trade talks with key partners including Canada, India, and Australia, has added to a more subdued outlook across financial markets. Investors are growing nervous about the ripple impact these tariffs could have on global demand, inflation, and economic growth overall.

ETHEREUM DAILY PRICE CHART

SOURCE: TradingView

In spite of the risk-off mood in the market, Ethereum is still drawing strong interest from institutional players and large holders. Whale wallets have accumulated hundreds of thousands of ETH in the last month, reflecting profound faith in the asset’s value over the long haul. Likewise, Ethereum-based ETFs in the United States have seen steady capital inflows, hitting record monthly highs. These events indicate that though the market might be facing short-term volatility, major players still see Ethereum as a good investment with long-term growth prospects.

TECHNICAL ANALYSIS

Ethereum has moved below its important daily support of $3,730, currently trading below $3,700, which can indicate further descent towards the next significant support around $3,500. The Relative Strength Index (RSI) has also declined, dipping below its overbought level, reflecting weakening bullish momentum. In addition, the Moving Average Convergence Divergence (MACD) displayed a bearish crossover, reinforcing the probability of a short-term downtrend. These indicators imply that if ETH fails to quickly retake key support levels, short-term sellers will likely prevail.

FORECAST

If bearishness continues, Ethereum may continue its fall to the psychological support price of $3,500. While macroeconomic headwinds like the Fed’s tight monetary policy and international trade tensions remain in place, risk-off attitude can control the short term. A breakdown below the $3,500 level may create an opening for additional losses that could push ETH further toward the $3,350–$3,400 zone if selling momentum escalates.

Conversely, in the event of regulatory certainty getting better and Ethereum ETF inflows further picking up steam, ETH may recover above the $3,700 level. Past trends reveal that August has historically been a good month for Ethereum, with a median return of 5.47%. If whale buying and institutional demand continue to be strong, it is possible to see a rally to the recent high of $3,941, provided external pressures such as tariffs unwind or market mood improves.