Ethereum (ETH) has seen a sharp decline of over 14.30% in the last 24 hours, dropping to around $2,330 on February 25. This price plunge marks the lowest level for ETH since the beginning of the month and is driven by a mix of negative market sentiment and external factors. Here’s an in-depth look at the causes behind this downturn.

Trump’s Tariff Threats Dampens Market Sentiment

A major catalyst for Ethereum’s decline is the renewed threat of tariffs under U.S. President Donald Trump. On February 24, Trump confirmed that tariffs on goods from Canada and Mexico would be reintroduced next week, following a temporary pause. This move is part of a broader strategy that includes 25% tariffs on Mexican and Canadian products and an additional 10% duty on Canadian energy exports. The statement has spooked investors, causing a downturn in both stock markets and cryptocurrencies like Ethereum.

This is not the first time trade tensions have impacted crypto prices. A similar reaction occurred on February 3 when Trump initially threatened tariffs on Canada, Mexico, and China. The renewed tariffs have raised a risk-averse mood in the market, sending Ethereum and other cryptocurrencies lower. In contrast, traditional safe-haven assets like gold have seen an uptick, rising by 12% this year as investors seek safer options amid global trade uncertainty.

Massive Liquidations Impact Ethereum Price

Another significant factor contributing to Ethereum’s price drop is a massive wave of liquidations across the crypto market. In the past 24 hours, over $1.34 billion worth of positions were liquidated, marking the highest liquidation volume since the February 3 market rout. Long positions accounted for the majority of these liquidations, totaling $1.25 billion. The forced selling of long positions has amplified the downward pressure on ETH and other crypto assets.

Ethereum’s liquidation volume reached $294.12 million, with a significant portion coming from long trades. This spike in liquidations is a result of excessive leverage in the market, where traders who were overly confident in Ethereum’s price direction are now being forced to sell their positions due to margin calls. Such large-scale liquidations exacerbate the market downturn and cause rapid price drops, especially in volatile assets like ETH.

Ethereum Technical Indicators Signal Further Downside

In addition to the macroeconomic factors and liquidation activity, Ethereum’s technical indicators point toward further downside potential. ETH has broken below a key trendline in its bear pennant pattern, signaling that the price could continue to decline. The breakdown of this pattern, if accompanied by high trading volumes, could lead to an additional 20% drop in Ethereum’s value.

The downside target for Ethereum, based on this technical pattern, is around $1,945, a significant drop from the current price levels. If this breakdown continues, ETH could see further declines in the coming weeks as market participants adjust their positions.

Conclusion

Ethereum’s recent price decline is driven by a combination of global trade uncertainty, a surge in liquidations, and technical market signals. The renewed tariff threats from President Trump have dampened market sentiment, leading to a broad sell-off in risk assets like cryptocurrencies. With massive liquidations and a potential technical breakdown, Ethereum faces the risk of further declines, potentially reaching the $1,945 mark in the coming weeks.