Ethereum (ETH) has taken a significant hit, with its price plunging over 11.75% in the last 24 hours to trade near $1,900. At one point, ETH touched $1,755, marking its lowest level since October 2023. The sharp decline comes amid a broader downturn in the cryptocurrency market, triggered by economic concerns, liquidations, and bearish technical indicators.

With Ethereum and other major cryptocurrencies struggling, investors are left wondering: Why is ETH price falling today?

What’s Causing Ethereum’s Price Decline?

Multiple factors are contributing to Ethereum’s price slump, including:

• US Recession Fears: Growing concerns over an economic downturn are pushing investors away from riskier assets like cryptocurrencies.
• Massive Crypto Liquidations: Long positions worth millions have been liquidated, adding to selling pressure.
• Bad Loans in Crypto Markets: Loans backed by ETH as collateral are at risk of liquidation, leading to forced selling.
• Bearish Technical Signals: Ethereum’s price charts indicate further downside potential if key support levels are broken.

1. US Economic Concerns Weigh on Crypto Markets

Ethereum’s recent price drop is closely tied to the broader financial market downturn. Major US stock indices, including the S&P 500, Nasdaq, and Dow Jones, have faced sell-offs, leading to a 4.6% decline in the total crypto market capitalization in the past 24 hours.

Economic uncertainty has grown due to recent actions from financial giants like JPMorgan and Goldman Sachs:

• JPMorgan raised the risk of a US recession to 40% for 2025, up from 30%, pointing to uncertainty over economic policies.
• Goldman Sachs increased its 12-month recession probability to 20% from 15%, citing global economic turbulence.

Adding to these fears, trade tensions between the US, Canada, Mexico, and China have escalated:

• The US imposed 25% tariffs on goods from Mexico and Canada and 10% tariffs on Chinese imports.
• In response, Canada and Mexico have declared retaliatory tariffs on US goods.
• China has increased tariffs on US products and imposed export restrictions on 25 American firms.

This ongoing trade war is expected to increase inflation in the US, making investors cautious about risk-on assets like Ethereum and Bitcoin. Historically, crypto markets have reacted negatively during periods of economic turbulence—such as the March 2020 COVID-19 crash.

2. Crypto Market Liquidations Intensify Selling Pressure

Ethereum’s price drop has been further fueled by massive liquidations in the crypto market. A liquidation occurs when traders who borrowed funds to buy ETH are forced to sell their holdings to cover their losses.

With ETH’s sharp decline, long positions worth millions were wiped out, triggering a cascading effect of forced selling. This has only added to Ethereum’s bearish momentum, making it difficult for the price to recover in the short term.

3. Bad Loans Backed by ETH Face Liquidation Risks

Another major factor contributing to Ethereum’s decline is the increasing risk of crypto loans being liquidated. Many lending platforms allow users to borrow funds by using ETH as collateral. However, when ETH’s price drops significantly, the collateral’s value decreases, and borrowers may be forced to sell their ETH holdings to cover their debts.

As a result, a large amount of Ethereum is being dumped into the market, further pushing prices lower.

4. Bearish Technical Patterns Point to Further Downside

Ethereum’s technical indicators suggest that the recent decline may not be over yet. Charts show a bearish breakdown, and analysts are watching key support levels:

• If ETH fails to hold above $1,900, further declines to $1,750 or lower could be likely.
• The Relative Strength Index (RSI) is trending downward, indicating that ETH is currently in oversold territory but has yet to find a strong support level.
• If Bitcoin continues to fall, Ethereum could follow, as the two assets remain highly correlated.

What’s Next for Ethereum?

While Ethereum is facing strong bearish pressure, there are a few factors that could help it stabilize:

• Federal Reserve Rate Decisions: If the Federal Reserve signals a softer stance on interest rates, risk assets like ETH could recover. However, bond traders currently expect no rate cuts before June, which could keep markets volatile.
• Institutional Buying: Large investors stepping in to buy ETH at lower prices could help stop the decline.
• Market Recovery: If Bitcoin and other leading assets stabilize, Ethereum could follow.

For now, traders should keep an eye on key support levels and be prepared for potential further downside if economic uncertainty persists.

Final Thoughts

Ethereum’s price decline is part of a broader market downturn driven by economic fears, liquidation events, and bearish technical signals. With recession concerns growing and trade tensions escalating, investors are moving away from high-risk assets like crypto.

If ETH fails to hold support at $1,900, it could drop further toward $1,750 or lower. However, if macroeconomic conditions improve or institutional buyers step in, Ethereum could recover in the coming weeks.

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