On Monday, the price of Ethereum plunged to an almost five-month-low of $2,300 as the threat of a world trade war caused investors’ nerves.
EthereumETHOn the morning of February 3, Asian time, after U.S. president Donald Trump’s speech to Congress. announced Tariffs were imposed on China, Canada and Mexico this weekend.
Inflation could be boosted by higher import duties, which would lead to potentially higher interest rates. The resulting risk-off attitude pushed cryptocurrency prices down.
Altcoins fell 28 percent to $1.07 billion at the time of publication.XRP), Solana (SOLDogecoinDOGECardanoADAThe losses ranged from 15-30% in the last day.
Ethereum has experienced the largest liquidity event it’s had in two years. $475.72 millions were liquidated over the last 24 hours from its long positions, and $127.78 from the short. Open interest on its futures markets fell by 27%, to $23,36 billion. Its funding rate also dropped, to the levels seen in the COVID crash of March 2020.
Due to increased market uncertainty, traders may be pulling back on leveraged positions.
According to Santiment data, the social sentiment weighted for ETH is now negative.
ETH technical Analysis
On the USDT chart for the day, ETH moved below both 50-day and the 200-day moving averages, indicating a clear short-term trend.
Aroon’s indicator showed that Aroon was down by 100% and Aroon Up at 0%. That means there is a possibility of further loss for the asset in the future.
The Relative Strength Index with its oversold value suggests, however, that the selling pressure for ETH is easing. A bullish trend is usually seen when an asset reaches its lowest price. The trend is confirmed if ETH returns to the 200-day average.
ETH might rebound
Although the stock market is in turmoil, some signs of dip-buying are showing up, suggesting that many investors view the current pullback as an investment opportunity, rather than the continuation of a downturn.
According to a report by data CoinGlass. Such outflows typically indicate that investors have been accumulating coins during the downturn, in anticipation of a recovery after bearish pressure has eased.
Following the recent drop in price, whales are also buying this largest altcoin. A Feb. 3, X post A whale bought 35,494 Ethereum, which is worth $88 Million, from Onchain Lens.
Following the recent price drop, another whale was reported to have bought $ETH worth $1,000,000.
Georgii Verbitskii Founder of TYMIO speculated on crypto.news in a comment that ETH may see a brief bounce to $2700 driven by technical and market factors. However, Verbitskii noted that Ethereum struggled recently and is unlikely to recover against Bitcoin without fresh catalysts.
“If global tariff concerns escalate or another wave of negative news hits the market, we could see one more leg down before ETH finds more stable ground,” He added.
Ali Martinez is a leading analyst. identified A parallel ascending channel can be seen in the price movement of Ethereum on the three-day chart. He stated that ETH’s trajectory must be sustained within the channel if it is to maintain the $2750 support level. Martinez forecasted a rebound up to $6760, if the $2,750 level held.
Ether still owned 18.4% at the time of publication, and was trading for $2.541 each coin.
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Source: crypto.news
