- Ethereum faces bearish pressure, dropping 11% to $2,098 as its ascending support breaks, resembling a 2021 double-top pattern.
- Market sentiment flipped after Trump’s tariff announcement, wiping out ETH gains from the U.S. Crypto Strategic Reserve news.
- Whales offloaded 30,000 ETH as DeFi activity weakens, with futures open interest and stablecoin liquidity both in decline.
Ethereum is facing a bearish momentum as the price of the cryptocurrency continues to decline, with analysts sounding alarm. Stockmoney Lizards pointed out that Ethereum’s ascending support has been breached. With this structure, the analyst pointed towards the appearance of the double-top pattern that was highlighted earlier in 2021. He pointed out that for Ethereum to recover more profound, it must first regain support on a monthly closing basis.
Ethereum’s Short-Lived Rally
The shift came after a small climb following Donald Trump’s March 2 announcement on a U.S Crypto Strategic Reserve. It later caused the coin to reach above $2,500 to its highest level yet. However, this was short-lived and the market turned bearish after Trump announced that tariffs on China, Canada, and Mexico would begin from March 4. This announcement increased the anticipation of more instability in the economy affecting the stock market.
The price of Ethereum has now gone below the 2,190, the price level it was at before the ramp up. Decentralized finance activity is also indicative of weakness. Data from Coinglass reveal that open interest in Ethereum futures has dropped by 10% within the last one day, which points towards trader’s bearish expectation.
DeFiLlama reveals that outflows of stablecoins have been at $109 million since March 1. The total value of Ether locked in DeFi has dropped to the lowest point this year after it was at its peak at $71 billion in January.
Whales Dumping Ethereum
The ETH whales are also reducing their stake. Blockchain tracker Lookonchain revealed that 30,000 ETH or roughly $68 million were moved to two trading firms, namely FalconX and Galaxy Digital. The transaction came from a wallet associated with Genesis, indicating that institutional players are decreasing their exposure. These actions lead to further decline in the prices after large-scale sell-offs have been effected.
The technical analysis below reveals that Ethereum is on a bearish run. The Relative Strength Index of 34 is close to the oversold level which conveys weak buying pressure. ETH also trades below key moving averages, with the 10-day EMA at $2,338 and the 50-day SMA at $2,852. These levels show a declining tendency which means that these levels are likely to decrease further in the future.
Source: TradingView
Oscillator signals are mixed, bringing some to this market momentum picture. However, a negative trend in moving averages and MACD indicates a further decline in the price. The nearest support level on the Ethereum price chart is $2,069 while the first resistance level is $2,163 and the second at $2,321. However, losses could still be in the picture in the coming day should the current trend continue to persist in Ethereum. The market outlook and fundamentals are relatively poor and have influenced traders to be careful during these times.
