Ethereum (ETH) has experienced significant losses, shedding nearly 50% of its value since the end of the 2024 bull market that was fueled by President Donald Trump’s election victory. The broader cryptocurrency market is also facing a downturn, down approximately 30% from its three-month high of $3.895 trillion, according to Coingecko. Ethereum, the second-largest cryptocurrency by market capitalization, was trading at $2,102 on Friday, marking a drop of more than 10% in the past 24 hours and 22.8% over the last seven days. This price is the lowest Ethereum has reached since December 2023.

Ethereum Losses Continue, Following Market Downward Trend

Ethereum’s recent struggles are part of a broader market downturn, with the cryptocurrency experiencing a wave of forced sell-offs, adding to the downward price pressure. According to Coinglass, approximately $211 million worth of Ethereum liquidations occurred within 24 hours, with long positions accounting for $180.89 million of the total. These forced liquidations have compounded the asset’s price decline. Many analysts, including cybersecurity engineer Matt C, attribute Ethereum’s troubles to the recent hack at crypto exchange Bybit, which led to one of the largest Ethereum whales being created.

The hack, believed to be perpetrated by North Korea’s Lazarus Group, has resulted in the movement and swapping of stolen funds, which could further damage Ethereum’s value. As the hacker’s funds are moved, market participants are growing concerned that large sell-offs could take place, causing Ethereum’s price to drop even more.

Ethereum Tests Critical Support Level

Ethereum is currently hovering around a critical support level of $2,000, a psychological level that has historically been important in determining short-term direction. If the price falls below $2,000, it could open the door for further declines, with the next significant support level being around $1,800, a price point not seen since the end of the 2023 bear market.

On the daily chart, Ethereum has formed a descending channel, and the recent price action has seen it consolidate at lower levels around $2,300. If Ethereum manages to break through the $2,500 resistance level, a potential rally toward $2,870 could follow, with the next target being around $3,400. However, if the price fails to hold above $2,000, Ethereum could continue its downward trajectory, with potential losses continuing for at least a couple of weeks. A breakdown of the $2,230 support level has raised concerns about the short-term outlook, signaling further potential downside for Ethereum.

Why is the Crypto Market Down Today?

The broader cryptocurrency market is struggling, as the optimism surrounding Trump’s pro-crypto stance fades. Most cryptocurrencies in the top 20 by market capitalization, excluding stablecoins, have experienced a loss of at least 10% in the past week. Bitcoin, the largest cryptocurrency, has dropped below $80,000, marking a 27.6% decline from its all-time high of $108,786 on January 20.

The market’s uncertainty has been fueled by Trump’s recent decision to impose large tariffs on Canada and Mexico, with the tariffs set to increase by 25% next week. This development has fueled risk-averse sentiment across global markets, including cryptocurrency. Investors had previously expected a favorable regulatory environment for crypto under the Trump administration, but the lack of clarity and the recent tariff decisions have led to increased caution among investors.

Ethereum’s competitor, Solana, has also suffered, recording a 27% decline over the past week. The altcoin is struggling to hold support at the $125 level, with bulls resisting further declines.

Conclusion

Ethereum’s recent price action is a clear reflection of broader market uncertainty, with heavy liquidations, technical weaknesses, and macroeconomic factors contributing to the asset’s struggle. The $2,000 support level is a crucial point for Ethereum, and its ability to hold or break this level will determine the future trajectory of the asset. With market conditions still uncertain, Ethereum and the broader crypto market are likely to face more volatility in the weeks ahead.