Ethereum (ETH) has seen a significant decline recently, dropping 15% in just 24 hours, bringing its price down to $2,050. This sharp decrease has erased all of the gains made over the weekend and marked a return to levels last seen in November 2023. With ETH’s performance worsening, analysts are warning that the cryptocurrency could be heading towards its worst first quarter in history, with a potential drop to as low as $1,600.

Why is Ethereum’s Price Falling?

Ethereum has been underperforming for the past few months, facing a combination of factors that have contributed to its decline. Several issues, including weak investor sentiment, declining institutional demand, and broader economic concerns, have caused Ethereum to struggle. Rising global uncertainty, particularly due to geopolitical tensions, such as President Trump’s recent threats of tariffs on Canada, Mexico, and China, has contributed to market volatility and added pressure to cryptocurrencies like Ethereum.

Additionally, inflationary concerns, a weak stock market, and trade uncertainty have all made investors more risk-averse, leading to lower appetite for assets like Ethereum. These macroeconomic factors are clearly affecting Ethereum’s price, as it continues to battle against Bitcoin and the broader market.

Ethereum ETFs See Major Outflows

One of the biggest contributors to Ethereum’s price drop has been the significant outflows from Ethereum-based exchange-traded funds (ETFs). In the past week alone, Ethereum ETFs saw a staggering $335 million in outflows. This has placed considerable downward pressure on ETH, as investors pull their funds from these products.

Among the hardest hit is BlackRock’s iShares Ethereum Trust (ETHA), which saw over $164 million in withdrawals since February 24. This large outflow has also caused a sharp decline in ETHA shares, dropping by 38.6% since the start of 2025 and erasing all post-election gains. As a result, Ethereum ETFs are now down 40% since their launch and 49% below their highs from December 2023. These massive outflows have compounded Ethereum’s struggle, further dampening market sentiment.

Ethereum Faces Major Losses in 2025

With Ethereum already down 36% in 2025, analysts are warning that this could be the worst Q1 in Ethereum’s history. If the price continues to fall, ETH could drop as low as $1,600, surpassing the losses seen in Q1 2018 when Ethereum experienced a significant decline after the previous market cycle peak.

Currently, Ethereum’s price is testing key support levels. The first support zone is around $2,020, with stronger support near the $2,000 mark. If these levels fail to hold, Ethereum could drop to $1,880, and further losses may push it towards the $1,750 range, with critical support at $1,640.

A Potential Buying Opportunity?

Despite the current downturn, some analysts view Ethereum’s sharp decline as a potential buying opportunity. While the market sentiment remains weak, and Ethereum continues to face substantial headwinds, the price levels around $2,000 may attract long-term investors who are betting on a future recovery. Given Ethereum’s established position as one of the leading cryptocurrencies, some investors may see this dip as a chance to accumulate more ETH at a discounted price, anticipating that it will eventually rebound.

Conclusion: What’s Next for Ethereum?

Ethereum’s decline to $2,050 has raised significant concerns about its future. The heavy outflows from Ethereum ETFs and broader market uncertainty have compounded its downward trend, making it increasingly difficult for ETH to recover in the short term. With analysts warning of a potential drop to $1,600, Ethereum may be heading toward its worst Q1 in history.

While the current market conditions are far from ideal, some investors view the sharp decline as a potential opportunity to buy at lower prices. Whether this marks the end of Ethereum’s sell-off or the beginning of further losses remains to be seen. What is clear, however, is that Ethereum faces significant challenges in the coming weeks, and its performance will continue to depend on both macroeconomic factors and investor sentiment.