Ethereum (ETH) has plunged into dangerous territory as its weekly Relative Strength Index (RSI) hits levels not seen since May 2022, sparking fears of further downside ahead. The second-largest cryptocurrency has dropped 13.8% over the past week, now battling to hold the critical $2,000 support level amid broader market turmoil.
Market Impact of Trump’s Trade Tariffs
The crypto market is reeling from the impact of President Trump’s new trade tariffs on Canada and Mexico, which have intensified recession fears. According to Kalshi data, there’s now a 39% probability of a recession in 2025, sending shockwaves through both traditional and crypto markets.
Technical Analysis Reveals Warning Signs
Key technical indicators paint a concerning picture for Ethereum:
- Weekly RSI has dropped to 35.87 – lowest since May 2022
- Total crypto market cap declined from $3.7T to $2.8T
- ETH down 41.6% year-over-year while BTC up 26%
- Critical support at $2,000 under intense pressure
Expert Analysis: Potential $800 Price Target
Crypto analyst Jesse Olson warns that history could repeat itself. In May 2022, when RSI hit similar levels, ETH subsequently dropped 60%. Following this pattern, Ethereum could potentially fall to around $800 from current levels – a scenario that has sent shockwaves through the crypto community.
Bullish Counter-Arguments
Despite the bearish indicators, some analysts remain optimistic. ETH exchange balances have reached a 9-year low, potentially indicating strong holder conviction and reduced selling pressure. Additionally, the 21-Day EMA on the 3-Month chart has historically served as strong support, never seeing a candle close below this level.
Market Outlook
While short-term pressure remains intense, several factors could support ETH’s recovery:
- Record-low exchange balances strengthening scarcity narrative
- Historical significance of current technical levels
- Potential oversold conditions on multiple timeframes
At press time, ETH trades at $2,126, down 8.9% in the past 24 hours. Traders and investors should maintain strict risk management given the current market volatility and uncertain macroeconomic conditions.