Ethereum is currently undergoing a significant downturn, with its price plummeting to $2,400 as the broader cryptocurrency market adopts a cautious posture. This decline comes at a time when both Bitcoin and other notable altcoins are also experiencing losses, but Ethereum”s decline has been more pronounced, with a drop of approximately 9 to 10% in just the last 24 hours. Trading volumes have surged past $50 billion, indicating a wave of panic selling rather than mere profit-taking.
The sell-off has been exacerbated by low liquidity and high leverage within the market, which have intensified the losses as traders react to the shifting market dynamics. Over $2.5 billion in crypto positions have been liquidated in a single day, with Ethereum constituting a substantial portion of these liquidations. Many traders had previously placed bets on rising prices, leaving Ethereum vulnerable once critical support levels were breached, which in turn triggered a series of margin calls.
In addition to forced liquidations, large investors and institutions have contributed to the downward pressure. Following months of accumulation, many significant holders are now offloading portions of their positions. Data from ETF flows and derivatives suggest that investors are actively seeking to mitigate their risk exposure. As the total market capitalization of cryptocurrencies approaches $2.6 trillion, fear levels remain elevated, further indicating a lack of confidence among market participants.
Analyzing the price action, Ethereum”s trajectory appears firmly within a bearish phase. The daily price chart indicates that ETH is caught in a downward channel that has defined its price movement since late 2025. The recent price action was rejected in the $3,200 to $3,300 range, just below both the 100-day and 200-day moving averages, effectively quashing any attempts to find stability.
Once ETH fell below the critical $2,800 support level, it confirmed the continuation of the downtrend. Observations from recent price bars reveal strong selling pressure, with no immediate indication that sellers are losing momentum. Furthermore, momentum indicators reflect significant weakness, with the RSI dropping into the mid-20s, indicating that while ETH is deeply oversold, there are currently no signs of a reversal.
Looking ahead, there are two primary scenarios for Ethereum”s price. The first suggests a potential short-term rebound that could push the price back up to the $2,600 to $2,700 range, where old support levels may now serve as resistance. If Ethereum fails to breach this area, it could fall further to $2,250, with a possible decline to $2,100 if selling intensifies.
Conversely, a more optimistic outlook will require Ethereum to maintain a price above $2,400, establish a higher low, and close above $2,800 to set the stage for a recovery back toward $3,100 to $3,300. At present, it appears that Ethereum is undergoing a necessary leverage reset—though challenging, such resets can pave the way for a more robust recovery.
