The Crypto Industry saw a major setback this Monday as prices of Ethereum, as well as Bitcoin, fell amid crypto selloffs. The Trump administration’s imposition of tariffs is the reason behind the significant plunge in crypto prices. The investors rushed to offload risky assets and rushed towards relatively safer ones. This is the biggest drop Ethereum ever had since 2021. If you wish to know the reason behind the major price drop in detail, this article is for you. It brings you all the details we have so far about the Ethereum prices and the upcoming possible scenarios in the crypto landscape.
Ethereum Prices
The Ethereum prices have had a significant fall since it reached its current cycle high of $4107 in the month of December. At that time, it seemed as if Ethereum had successfully broken out from the descending resistance trend line. However, the decrease was just a deviation since it declined further below the trend line just after.
The prices fall to a low of $2,125 on the 3rd of February 2025. This was the lowest price since June. The currency could barely survive breaking its low of $2,100 in 2024. Ethereum did manage to bounce back by 20% after the crash. It reached the support trend line that has existed for more than 900 days. It also managed to validate the $2,450 horizontal support area and created a long lower wick.
However, the technical indicators despite the bounce back are still bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are both currently facing a fall. Hence, it is clear that the price action does not align with the indicator readings.
Why Are The Ethereum Prices Actually Dropping?
The main reason behind the prices of Ethereum witnessing a huge fall is the selloffs that happened after Donald Trump’s announcement of tariff imposition. Trump’s administration on Monday issued an order to impose 25% tariffs on all goods imported from Canada and Mexico. It also announced a tariff of 10% on all goods imported from China. The affected countries have also announced retaliative measures which sparked concerns and speculations of a possible tariff war between the nations. The uncertainty, rising geopolitical tensions, and growing economic conflicts severely affected all the markets. The investors are actively seeking safer bonds to invest in which led to a price drop in major cryptocurrencies like Ethereum and Bitcoin.
Can Ethereum Recover From The Dip?
Ethereum’s existence and its future in the upcoming years severely depend on the $2200 support level. In case Ethereum manages to maintain itself above this $2200 support level, there are possibilities of recovery. If it manages to break above the $2,600 resistance, there are high chances of a potential push towards the $3000 zone. However, if it fails to maintain the $2200 support level, further downside is highly possible. The bearish movements of both MACD and RSI indicators show that the downtrend can actually continue if Ethereum prices fail to maintain necessary levels of resistance. Investors should definitely monitor such levels to anticipate the next move in the market.
Ethereum Takes Charge Of The Liquidation Event
Ethereum takes charge of the major liquidation event with around $609 million positions reportedly wiped off. The DeFi markets also suffered from panic selling which quickly spread like wildfire to other products. Apart from Ethereum and Bitcoin many more cryptocurrencies like Cardano and Solania also witnessed major falls in prices.
According to market analysts, Ethereum and other cryptos can face further downtrends if the economic conflicts are not resolved. It is interesting to see if the cryptos manage to hold the resistance levels necessary or will have further downtrends.
What Does The Market Specialists Have To Say About The Current Situation?
Peter Schiff who is known worldwide for his opinions on Bitcoin recently made an X post highlighting the current market situation as a sign of a “long crypto winter.” He pointed out the current downtrends in the market with Bitcoin facing a 7% drop while Ethereum facing a 33% plunge. He used the famous Punxsutawney Phil, the groundhog who predicts the length of winters suggesting that the markets are in for a long downtrend. On the other hand, Michael Saylor, who is a Bitcoin advocate, has been urging investors not to sell their coins off.
What Are The Future Possibilities For Ethereum?
Following are the two future possibilities for Ethereum that the investors must consider.
- The first future possibility for Ethereum is its potential recovery. If it manages to achieve a breakthrough above $2900, it could definitely lead to a rebound towards the resistance levels of $3000. This will set Ethereum up for further possible gains towards $3150.
- The second possibility for Ethereum is further downtrends in the prices. If it fails to reclaim the $2600 level, it may result in further declines. In such a case, $2150 will act as the next important level. If the downtrends continue to $2250, Ethereum might get even closer to $2000. This will raise further concerns for a deeper correction.
Technical Indicators Current Status
Following is the current status of the technical indicators you must keep an eye on.
- Hourly MACD: The MACD currently shows bearish movements.
- Hourly RSI: The current RSI is 28.7 which indicates over selling.
- Major Support: $2,250
- Key Resistance: $2,600