Ethereum Price Plunges to Five-Month Low Amid Global Trade War Concerns

Ethereum’s price plummeted to a nearly five-month low of around $2,300 on Monday morning in Asia, triggered by the specter of a global trade war and a risk-off sentiment that unsettled investors.

Market Sentiment and Liquidations

The altcoin market fell 28% to nearly $1.07 trillion, with major altcoins like XRP, Solana, Dogecoin, and Cardano recording losses between 15-30% over the past day. Ethereum experienced its largest liquidation event in the past two years, with $475.72 million liquidated from long positions and $127.78 million from short positions over the past 24 hours.

The sharp drop in Ethereum’s open interest suggests traders are pulling back from leveraged positions, likely due to heightened market uncertainty. The weighted social sentiment for ETH has turned negative, according to data from Santiment.

Technical Analysis

On the daily USDT chart, ETH has moved below the 50-day and 200-day moving averages, signaling a strong short-term bearish trend. The Aroon indicator shows the Aroon down at 100% while Aroon Up showed a reading of 0%, which means the asset could potentially see further losses over the coming day.

However, the Relative Strength Index, with an oversold reading, suggests that selling pressure on ETH may be easing. Typically, an asset experiences a bullish reversal once it has hit its bottom. This trend can be confirmed if ETH makes its recovery back above the 200-day moving average.

Signs of Dip Buying and Whale Activity

Despite the sharp sell-off, signs of dip buying are emerging, hinting that some investors see the pullback as a buying opportunity rather than a prolonged downturn. Investors have withdrawn $326.7 million worth of ETH from exchanges over the past three days, according to data from CoinGlass.

Whales have also begun buying the largest altcoin following its recent price plunge. A whale purchased 35,494 ETH, worth nearly $88 million, and another whale bought $1 million worth of ETH following the recent dip.

Expert Insights

“If global tariff concerns escalate or another wave of negative news hits the market, we could see one more leg down before ETH finds more stable ground,” said Georgii Verbitskii, Founder of TYMIO.

Analyst Ali Martinez identified an ascending parallel channel in Ethereum’s price action on the 3-day chart. He noted that ETH must hold the $2,750 support level to sustain its trajectory within the channel. If this level holds, Martinez projected a potential rebound to $6,760.

At press time, Ether was still down 18.4%, exchanging hands at $2,541 per coin. The cryptocurrency market is highly volatile, and investors should stay informed about the latest developments and trends.

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