Ethereum (ETH), the second-largest cryptocurrency by market cap, has experienced significant price fluctuations, leaving investors and enthusiasts asking, why is Ethereum price down today? As of Tuesday, March 04, 2025, the crypto market remains as volatile as ever, and Ethereum is no exception falling to the psychological support of $2,000.

Why Is Ethereum Falling? ETH Price Test November 2023 Lows

At the time of writing, Ethereum is changing hands at just under $2073, after previously establishing a daily low at the $2000 level, testing its 16‑month lows from November 2023. This follows a highly volatile period: on Sunday, the price rose by 14%, only to drop by 15% on Monday.

Ethereum price today. Source: CoinMarketCap

This volatility comes on the heels of President Trump’s latest announcement, in which he pledged to create a U.S. cryptocurrency reserve and include Ethereum in it. He also remarked that he “loves” the world’s second-largest cryptocurrency.

However, the euphoria proved short-lived, as it did with other tokens including Bitcoin, and digital assets—like the stock market—returned to their declines, and by a significant margin.

How Low Can Ethereum Go?

For now, the $2000 level has been defended. However, should this support break—thus invalidating the consolidation that has been forming since the beginning of 2024—the implications for ETH could be profoundly bearish.

The first support level I identified is $1540, corresponding to the lows from the second half of 2023. The next level is around $1000–$1070, which represents the lows from 2022 that were tested twice. The final level is the lows from 2020 at a mere $174.

Where does such a drastic projection—a drop of about 90% from current prices—come from? It originates from a double-top pattern I identified on the weekly chart (with peaks in 2024 exceeding $4000), whose lower boundary is precisely the $2000 level. Should this level break, the measured range of the pattern would be around $174.

Will Ethereum crash? ETH/USDT technical analysis. Source: Tradingview.com

Although I do not currently expect such a sudden crash in Ethereum—especially given its anticipated role as a significant component of the United States’ reserves—it is wise to keep this cautionary scenario in mind.

Ethereum Price Crash: 4 Reasons

Ethereum has long been a cornerstone of the cryptocurrency world, known for its smart contract functionality and decentralized applications (dApps). However, despite its strong fundamentals, ETH has faced a series of challenges that have contributed to its price decline. If you’ve been wondering Why Ethereum is going down, here are the primary reasons behind the slump.

1. Macro-Economic Pressures and Trade Tensions

One of the biggest factors affecting Ethereum’s price today is the broader economic climate. Global trade tensions, particularly stemming from U.S. policies under President Trump, have rattled financial markets. Recent announcements of tariffs on countries like Canada, Mexico, and China have sparked a risk-off sentiment among investors. Cryptocurrencies, often viewed as high-risk assets, tend to suffer when traditional markets turn bearish.

2. Massive Liquidations and Whale Activity

Another critical reason Why Ethereum is going down is the significant liquidation events in the crypto space. Large holders, often referred to as “whales,” have been offloading their ETH holdings, adding downward pressure on the price. On-chain data indicates that Ethereum’s supply on centralized exchanges hit a 12-month high of 16.2 million ETH in early February, signaling heavy selling by major players.

Furthermore, there have been massive liquidations of long positions on leveraged markets over the past 24 hours, amounting to $861 million in total. Of that, BTC longs accounted for $310 million, while ETH longs were second, with $168 million.

Source: Coinglass

3. Technical Breakdowns and Bearish Indicators

Analysts have pointed to bearish patterns, suggesting a potential further drop to $1,945—or even as low as $1,200—if momentum doesn’t shift. The Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) also indicate persistent bearish sentiment, providing a technical answer to Why Ethereum is going down.

4. Competition and Network Challenges

Ethereum’s dominance in the blockchain ecosystem is under threat from competitors like Solana, which boasts faster transaction speeds and lower fees. The rise of Layer-2 solutions, while beneficial for scaling, has also shifted activity away from Ethereum’s base layer, reducing demand for ETH in some cases.

Moreover, Ethereum’s shift to proof-of-stake with “The Merge” in 2022 was meant to create a deflationary model by burning transaction fees. However, since April 2024, the supply has increased by 0.37%, reaching 120.59 million ETH. This inflationary trend, coupled with lower network activity, has dampened investor confidence.

Source: YCharts

Will Ethereum Go Up?

While the reasons behind Why Ethereum is going down are clear, the future isn’t necessarily bleak. Several positive indicators suggest a potential rebound:

• Declining Exchange Reserves: Data from CryptoQuant shows adrop in ETH held on exchanges, hinting at a shift to self-custody andreduced selling pressure.
• Institutional Interest: Despite short-term outflows,long-term confidence in Ethereum remains, with some analysts predicting arally to $7,000 by the end of 2025 if adoption grows.
• Proposed Upgrades: Solutions like EIP-7781 aimto address network performance and restore Ethereum’s deflationary status,potentially boosting sentiment.

However, for Ethereum to recover, it must move back above critical resistance levels—such as $2,800—and overcome macroeconomic headwinds. Investors should keep an eye on market trends and global developments to gauge ETH’s next move.

Ethereum News, FAQ

What is happening to Ethereum?

Ethereum is experiencing significant volatility, with its price recently dropping to around $2,000. This decline is influenced by macroeconomic pressures, market-wide liquidations, and technical factors. While Ethereum briefly surged following an announcement from former President Trump regarding a U.S. cryptocurrency reserve, the excitement quickly faded, leading to renewed selling pressure.

Is there a future for ETH?

Yes, Ethereum continues to have a strong future, given its role as the leading smart contract platform. Despite short-term price fluctuations, Ethereum remains a key player in decentralized finance (DeFi), non-fungible tokens (NFTs), and enterprise blockchain solutions. Upcoming network upgrades, such as EIP-7781, are expected to improve scalability and restore Ethereum’s deflationary nature, potentially enhancing its long-term value proposition.

Can Ethereum reach $100,000?

While Ethereum reaching $100,000 is not impossible, it would require unprecedented adoption and market expansion. Analysts predict more moderate targets, such as $7,000 by the end of 2025, if institutional adoption increases and technical improvements enhance network efficiency.

Is ETH going to recover?

Ethereum has the potential to recover, but its price action depends on several factors, including macroeconomic conditions, investor sentiment, and technical resistance levels. A move above $2,800 would signal a stronger recovery, while continued global uncertainty could keep prices suppressed.