Analysis of Ethereum’s Recent Price Drop
Ethereum’s price has fallen below $2,100 for the first time in 15 months, marking a significant downturn in the cryptocurrency’s value. As of March 4, 2025, Ethereum is trading at $2,063, representing a 15% decline over the past 24 hours. This drop follows a brief rally triggered by Donald Trump’s announcement of a U.S. Crypto Strategic Reserve on March 2, which temporarily pushed Ethereum’s price above $2,500.
Several factors contribute to this decline. Firstly, Trump’s confirmation of new tariffs on China, Canada, and Mexico, set to take effect on March 4, has led to concerns about broader economic instability, negatively impacting market sentiment. The Ethereum futures market and decentralized finance (DeFi) activity also indicate declining momentum, with open interest in ETH futures dropping by 10% over the last day, according to Coinglass data.
The DeFi Total Value Locked (TVL) has hit its lowest point this year, declining from $71 billion in January to $48.1 billion as of March 4. Moreover, there has been $109 million in stablecoin outflows since March 1, as shown by DeFiLlama data, indicating a decrease in liquidity. Ethereum whales are also reducing their holdings, with a significant transaction reported by Lookonchain involving the offloading of 30,000 Ethereum (approximately $68 million) to FalconX and Galaxy Digital from a wallet connected to Genesis.
On the technical front, Ethereum’s Relative Strength Index (RSI) is approaching oversold at 34, suggesting reduced buying pressure. Moving averages indicate a strong downtrend, with Ethereum trading below key levels such as the 10-day Exponential Moving Average (EMA) at $2,338 and the 50-day Simple Moving Average (SMA) at $2,852. Although oscillators display conflicting indications, negative momentum and Moving Average Convergence Divergence (MACD) readings imply growing bearish sentiment.
Predictions and Potential Outcomes
Given the current market trends and technical indicators, Ethereum may experience further drops in the coming days if the bearish trend persists. The closest support is at $2,069, with resistance at $2,163 and $2,321. However, several upcoming events could provide a turning point for Ethereum’s price.
The Ethereum Pectra upgrade, scheduled for April, is expected to enhance scalability and staking flexibility, potentially attracting more network activity. Additionally, the first White House Crypto Summit on March 7 may provide further details about Trump’s plans for his crypto strategic reserve, which could impact market sentiment and Ethereum’s price.
Investors should closely monitor these events and the overall market sentiment, as they may influence Ethereum’s price trajectory. With the current decline in DeFi TVL and Ethereum futures market activity, it is essential to consider the potential risks and opportunities in the cryptocurrency market.
Key Points to Consider
- Ethereum’s price has fallen below $2,100 for the first time in 15 months.
- The decline is attributed to concerns about economic instability due to new tariffs and a decrease in DeFi activity and Ethereum futures market momentum.
- Technical indicators suggest a strong downtrend, with Ethereum trading below key moving average levels.
- Upcoming events, such as the Ethereum Pectra upgrade and the White House Crypto Summit, may provide a turning point for Ethereum’s price.
- Investors should carefully monitor market sentiment and technical indicators to make informed decisions.
