Ethereum has dropped below $2,100, marking its lowest point since December 2023 amidst escalating market concerns.
The cryptocurrency has seen a 15% decline in the past 24 hours, currently trading at $2,063. This downturn follows a brief surge after the announcement of a U.S. Crypto Strategic Reserve on March 2, which temporarily elevated ETH to over $2,500.
However, with fresh tariffs announced on China, Canada, and Mexico set to take effect on March 4, market sentiment has soured, igniting fears of broader economic instability.
The effect of these announcements has driven Ethereum’s price below its previous high of approximately $2,190. Both decentralized finance (DeFi) activity and the Ethereum futures market are showing signs of diminishing momentum, evidenced by a 10% drop in open interest for ETH futures over the last day.
In terms of DeFi, total value locked (TVL) has reached its lowest this year, plummeting from $71 billion in January to $48.1 billion as of March 4. Additionally, there have been $109 million in stablecoin outflows since March 1, indicating a significant decrease in liquidity.
Moreover, large Ethereum holders appear to be reducing their positions. Notably, a transaction on March 4 saw 30,000 Ethereum, equivalent to approximately $68 million, sold to FalconX and Galaxy Digital from a wallet linked to Genesis.
From a technical perspective, Ethereum exhibits heightened risks of further declines. The relative strength index (RSI) is nearing an oversold level at 34, reflecting waning buying interest. Furthermore, moving averages signal a strong downtrend, with ETH trading below critical thresholds, including the 10-day exponential moving average (EMA) at $2,338 and the 50-day simple moving average (SMA) at $2,852.
While oscillators present mixed signals, the prevailing negative momentum and MACD indicators point to growing bearish sentiment. Key support is identified at $2,069, while resistance levels are marked at $2,163 and $2,321. Ethereum may face additional declines in the days ahead if the bearish trend continues.
Looking ahead, several upcoming events may act as a pivotal point for Ethereum. The Pectra upgrade scheduled for April is anticipated to improve scalability and staking flexibility, potentially boosting network engagement. Investors are also focused on the inaugural White House Crypto Summit on March 7, which could shed light on further details of the U.S. crypto strategic reserve plans.
