Why is Ethereum (ETH) price down today?
Ether (ETH) has seen a sharp decline in price, experiencing a drop of over 11.75% within a 24-hour period, with current trading levels around $1,900. The downturn reached a session low of $1,755, marking its lowest value since October 2023. This significant decrease can be attributed to several underlying factors impacting the broader cryptocurrency landscape.
The influence of macroeconomic conditions plays a critical role, as fears of a U.S. recession seep into investor sentiment. Recent reports have heightened these concerns, with JPMorgan increasing recession risk estimates for 2025 to 40%, citing U.S. economic policies as a contributing factor. Furthermore, Goldman Sachs has adjusted its 12-month recession probability upward to 20%. The imposition of tariffs by the U.S. on goods from Mexico, Canada, and China has escalated trade tensions, amplifying fears of economic instability. Such market uncertainties tend to adversely affect risk-on asset classes, including cryptocurrencies like Ether.
In addition to macroeconomic pressures, massive long liquidations have plagued the crypto market, exacerbating Ether’s decline. In a single day, over $240 million in ETH positions were liquidated, with long positions accounting for 82% of total liquidations. As traders holding leveraged positions were forced to exit, a cascade effect of forced sell-offs ensued, contributing to the downward trend. Moreover, crypto loans backed by Ether as collateral are also at risk of liquidation, further intensifying sell-off pressure. A notable case involves a DeFi loan on the Sky protocol nearing liquidation as Ether slipped below critical support levels.
From a technical standpoint, Ether’s price action adheres to an inverse-cup-and-handle pattern, indicating a bearish trajectory. This pattern breakdown below key support levels suggests a potential further decline toward the estimated target of $1,700. Major moving averages, including the 50-day and 200-day exponential moving averages, remain significantly above current prices, reinforcing a bearish outlook.
The correlation between the crypto market and traditional equities has also been highlighted, with a reported 52-week correlation coefficient of 0.69 between Ether and the S&P 500 as of mid-March. This correlation underscores the potential for continued declines in crypto prices in conjunction with falling stock prices, especially as economic conditions remain fragile.
Traders are advised to monitor key price levels as Ether navigates within a descending channel that has formed since late February. While a technical rebound could see Ether target around $2,000, the persistent bearish sentiment leaves room for further declines.
