Ethereum (ETH) has plunged 30% over the past two weeks amid escalating global trade tensions. As broader market turmoil continues to impact crypto assets, analysts are closely watching key support levels that could determine ETH’s next major move.
Technical Analysis Points to Further Downside Risk
Renowned crypto analyst Ali Martinez warns that Ethereum could test the critical $1,200 support level in the near term. His technical analysis shows ETH breaking multiple support zones since December 2024’s $4,000 peak, suggesting bearish momentum remains strong.
The severity of the decline is highlighted by ETH trading below its realized price of $2,000 – a metric that historically signals market bottoms. Analyst Carl Moon draws parallels to March 2020’s COVID-19 crash when ETH dropped from $289 to $109 before staging a dramatic recovery.
On-Chain Metrics Show Mixed Signals
Despite the bearish price action, several on-chain indicators hint at a potential trend reversal:
- The Ethereum Fear & Greed Index sits at 20 (‘extreme fear’)
- MVRV Z-score suggests significant undervaluation
- Historical patterns indicate possible Q2 2025 rally
Market Outlook and Risk Factors
While some analysts remain optimistic about ETH’s long-term prospects, rising exchange reserves and continued selling pressure from large holders pose significant near-term risks. The last time similar conditions occurred in October 2023, ETH rallied 160% – though current macroeconomic headwinds may delay any potential recovery.
Frequently Asked Questions
What is causing Ethereum’s price decline?
The primary factors include escalating global trade tensions, broader crypto market weakness, and increased selling pressure from large holders.
Where is the next major support level for ETH?
Technical analysts identify $1,200 as a crucial support level that could determine ETH’s next major move.
Could ETH recover from current levels?
Historical patterns and on-chain metrics suggest potential for recovery, though macro factors may impact timing.