Drop in Ethereum value: Understanding the reasons behind today's Ethereum price decrease
The crypto market is currently experiencing a pullback, with shifting macro expectations playing a significant role. This comes ahead of Federal Reserve Chair Jerome Powell's speech this week and growing uncertainty around interest rate cuts.
Among the major cryptocurrencies, Bitcoin is down approximately 2.3% on the day. Ethereum, the second-largest cryptocurrency, is also feeling the heat, with a current price of $4,134—just above the 20-day Exponential Moving Average (EMA).
Ethereum's Recent Price Drop
The recent drop in Ethereum's price is primarily caused by a combination of seasonal market weakness, technical trendline violations, and price levels triggering liquidations and volatility.
Ethereum experienced a price drop during a seasonally weak period around early 2025, which broke a rising trendline and caused a temporary dip. Prices dropping below key support levels, notably below $4,200, have led to significant long liquidations and increased market volatility, amplifying downward pressure.
Despite these drops, analysts emphasize that such corrections are healthy if major Fibonacci retracement levels, like the 50% level around $2,145, hold. This suggests the price drop is part of regular market cycles rather than a fundamental collapse.
Longer-Term Fundamentals Remain Positive
Despite the short-term corrections, longer-term fundamentals remain positive. Institutional investments and ETF inflows are increasing, which supports upward momentum over the medium term. Structural upgrades and Layer 2 adoption could strengthen Ethereum’s fundamentals, potentially leading to price recovery and growth.
Next Steps for Ethereum
To regain bullish traction, ETH would need to reclaim $4,500 to signal renewed strength, and a push beyond $4,750 to $4,800 remains the key hurdle before any attempt at fresh highs. However, retail investors are also locking in gains, adding to the selling pressure on Ethereum.
Other cryptocurrencies are also feeling the impact of the broader market pullback. Ethereum's rival, XRP, is down around 6.33%, while Solana is down around 3.62%.
As always, it's essential to approach the crypto market with caution and make informed decisions based on thorough research and understanding of the underlying factors.
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