The price of Ether (ETH) has plummeted over the last 24 hours, showing a decline of more than 11.75% to approximately $1,900. During intraday trading, it further dipped to $1,755, marking its lowest value since October 2023. This decline is attributed to various factors including fears of a U.S. recession, significant long liquidations, risks faced by crypto loans collateralized by ETH, and bearish technical indicators.
Ether’s downturn is reflective of a broader decline in risk-on markets due to unfavorable macroeconomic conditions. The total market capitalization of cryptocurrencies has shrunk by more than 4.6% within the same period, coinciding with U.S. stock sell-offs. JPMorgan also increased the U.S. recession risk to 40% for 2025, citing extreme policies by President Donald Trump as a risk factor. Goldman Sachs raised its 12-month recession probability to 20%. Recent tariffs imposed by Trump have escalated trade tensions, particularly with Mexico, Canada, and China, which have announced or implemented retaliatory measures. These economic tensions are influencing the crypto market, with Ethereum and other major crypto assets historically declining during such turbulent periods.
The 52-week correlation between the crypto market and the U.S. benchmark index, the S&P 500, stood at 0.69 as of March 11, indicating a positive correlation that suggests crypto market declines might follow if U.S. stocks continue to fall. Bond traders currently see no need for a rate cut before June, with CME group data indicating high odds of the Federal Reserve maintaining existing rates in upcoming meetings. This lack of rate cuts dampens the risk appetite for both ETH and crypto markets.
Pressure on ETH prices is also mounting from problematic DeFi loans. A $74 million loan collateralized with $130 million in ETH was nearly liquidated as the price dipped below critical levels, forcing the borrower to add $34 million in ETH to avoid liquidation. Current liquidation threats persist if ETH falls further, threatening nearly $353 million in debts associated with similar loans.
Additionally, a surge in long liquidations has accelerated Ethereum’s price downtrend. Over $240 million worth of ETH positions were liquidated within 24 hours, with long liquidations accounting for the majority at 82%. This forced sell-off by exchanges as traders’ leveraged positions failed to meet margin requirements contributed significantly to the price drop.
From a technical analysis perspective, Ether’s current decline is part of an existing inverse-cup-and-handle pattern. This loss of bullish momentum is characterized by a temporary consolidation, failed breakout attempts, and a breakdown below key support levels. The measured move target suggests potential further declines towards $1,700. Support and resistance levels, including moving average indicators, continue to point to prevailing bearish sentiment.
This analysis does not constitute investment advice, and readers are encouraged to perform their own research when making investment decisions.
