Ethereum (ETH), the world’s second-largest cryptocurrency, is showing signs of deepening trouble amid a turbulent macroeconomic backdrop. After weeks of sideways trading, ETH’s price recently shattered crucial support, triggering mass liquidations and fueling concern over whether the $2,000 threshold can hold. Industry insiders and on-chain data analysts are sounding alarms about a potential sustained downturn that could push Ethereum even lower.

Ethereum Breaks Key Price Range, Triggering Massive Liquidations

For over a month, Ethereum’s price had been confined within a relatively narrow range, oscillating between roughly $2,350 and $2,900. This period of consolidation suggested the market was waiting for a catalyst to drive the next big move. That catalyst arrived on June 21, when ETH sharply dropped 4.56%, breaking below the $2,350 support level and plunging to $2,215—its lowest point in nearly 50 days.

This sudden drop caused over $250 million worth of long positions to be liquidated, as traders who had bet on Ethereum’s price rising were caught off guard. The event resembled a classic “rug pull” scenario where over-leveraged bulls face heavy losses as the market swiftly turns against them.

At first glance, this could be dismissed as a routine market correction. However, the data from on-chain metrics tells a different story, suggesting a more structural change is unfolding that could expose Ethereum’s next key support zone around $2,000 to serious risk.

Macro Headwinds and Geopolitical Turmoil Shake Crypto Markets

The broader market environment has also grown increasingly hostile. Over just three days, the crypto market’s total valuation shrank by nearly 3.5%, fueled by escalating geopolitical tensions. The situation worsened when the United States formally entered a conflict in the Middle East, fueling a widespread risk-off sentiment among investors.

Within this storm of uncertainty, Ethereum was hit particularly hard. Over the same 72-hour window, ETH’s price plunged more than 9%, far exceeding the broader market’s decline. The sharp break to $2,215 was not simply a product of retail panic—it was influenced by strategic exits by some of Ethereum’s largest holders.

Smart Money Exits Signal a Psychological Turning Point

On-chain analytics platforms reveal that Ethereum’s “Coin Years Destroyed” (CYD)—a metric that tracks long-dormant coins moving on the blockchain—reached a six-month high. This indicates that many investors who had been holding ETH for a long time suddenly decided to sell.

More specifically, data from Lookonchain shows an “OG” (original) wallet offloading 5,000 ETH just before the price broke key support at $2,400. Several mid-sized whales followed suit, liquidating positions as the price dropped. Such moves from major holders suggest a calculated strategy to lock in profits or limit losses before potential further declines.

This shift is significant because long-term holders (LTHs) have historically acted as a stabilizing force in Ethereum’s market. Their apparent loss of conviction signals a psychological shift that may discourage new buyers and set the stage for intensified selling pressure.

Can $2,000 Serve as Ethereum’s Last Line of Defense?

From a technical perspective, Ethereum would need to retrace roughly 12% from its current price near $2,270 to test the $2,000 support level. Given the recent sharp price drop and ongoing macro risks, this scenario seems increasingly plausible.

With the second quarter closing amid growing geopolitical uncertainty and a risk-averse market mood, investors remain on edge. Until clear signs of peace or resolution emerge on the international front, the crypto market—and Ethereum in particular—may remain vulnerable to sudden shocks and downward moves.

Positioning data reinforces this bearish outlook. Nearly $59 million in long liquidity has clustered around the $2,239 price level, indicating that many traders are betting against Ethereum and preparing for further declines. Should conviction in the market remain weak, another wave of liquidations could send Ethereum plunging below $2,200, heightening the risk of a retest of the psychologically critical $2,000 support.

What Lies Ahead for Ethereum?

Investors and analysts alike are closely monitoring how Ethereum navigates this precarious phase. While the $2,000 level is often cited as a strong psychological floor, the current combination of macroeconomic instability, smart money withdrawals, and bearish technical signals could challenge its resilience.

If Ethereum manages to hold above $2,000, it might stabilize and even attempt a recovery. However, a break below this line could trigger further panic selling and deepen losses across the crypto sector.

As always, traders should exercise caution amid heightened volatility and stay informed about both technical developments and global events that continue to impact market sentiment.