Ethereum’s Steep Decline: What Happened?
Ethereum has fallen to levels last seen in November 2023, mainly due to rising volatility linked to Trump’s trade war threats. Over the past 24 hours, ETH has dropped by 15%, causing its market cap to shrink by over 13%, now standing at $252.89 billion. After a brief spike above $2,500 following the US crypto reserve announcement, Ethereum’s price has now dropped back to $2,050, wiping out all of its weekend gains.
How Much Lower Can It Go?
As Ethereum’s price continues to decline, many investors are wondering how much further it can fall. Let’s take a closer look at the reasons behind Ethereum’s underperformance and what might lie ahead.
Why Is Ether Underperforming?
Ethereum’s price has been on a downward trajectory for the past three months. Several factors have contributed to its underperformance, including:
- Lower institutional demand for Ethereum.
- Broader macroeconomic concerns such as rising inflation, stock market weakness, and growing trade uncertainty.
- Weak investor sentiment, leading to reduced appetite for risky assets.
These factors have created a challenging environment for Ethereum, as investors have become more cautious about riskier investments like cryptocurrencies.
Ethereum’s Declining Open Interest and Liquidations
According to data from Coinglass, Ethereum’s open interest has fallen by 10.8%, now standing at $18.8 billion. Additionally, 24-hour liquidations have surged to $209 million, reflecting the heightened volatility in the market. This increase in liquidations indicates that many traders are being forced to close their positions as the price continues to drop.
Moreover, prediction markets on Polymarket show a 76% probability that ETH will drop to $1,900 by the end of the month, adding to the bearish sentiment surrounding the cryptocurrency.
Ethereum ETFs See Major Outflows
Ethereum ETFs have also faced significant outflows. Last week, Ethereum ETFs saw withdrawals totaling $335 million. Among the hardest-hit was BlackRock’s iShares Ethereum Trust (ETHA), which saw over $164 million in withdrawals since February 24. ETHA shares have dropped sharply, falling 38.6% since the beginning of 2025 to $16.09, erasing all of the gains made after the US election.
The ETFs are now down 40% since their launch eight months ago and 49% below their highs in December 2023. Peter Schiff, a prominent economist, noted that the worst part for investors is that Ethereum still has a long way to fall.
Ethereum on Track for Its Worst Q1 Ever?
With ETH already down by 36% in 2025, it is on track to have its worst first quarter on record. Analyst Venturefounder pointed out that if Ethereum’s price drops to $1,600, it would mark the worst Q1 decline in Ethereum’s history, surpassing the losses seen in Q1 2018 after the previous market cycle’s peak.
The current support levels for Ethereum are as follows:
- Initial support at $2,020.
- Stronger support near $2,000.
- Further support levels at $1,880, $1,750, and key support at $1,640.
A Buying Opportunity? Some Analysts Think So
Despite Ethereum’s sharp decline to $2,000, some market analysts view this as a potential buying opportunity for long-term investors. As the market remains volatile, ETH’s current price levels may attract renewed interest from those betting on a future recovery.
However, the question remains: is this the end of Ethereum’s sell-off, or is it just the beginning of more pain for investors? Only time will tell.
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