By Nermeen Nabil Khear 
TLDR
- Ethereum experienced a dramatic 20% price drop to $2,500, triggered by Trump’s announcement of new trade tariffs on Canada, Mexico, and China
- The crash resulted in the largest liquidation event in two years, with over $600 million in positions liquidated
- Despite the downturn, analysts including Felix Hartmann and Andrew Kang suggest the sell-off is driven by forced selling and predict a potential rebound to $2,700
- Large-scale whale activity has been observed, with one whale purchasing 35,494 ETH (worth approximately $88 million) following the price drop
- The market reaction appears connected to broader financial market uncertainty, particularly in Asian markets where indices showed notable declines
Ethereum’s price has taken a sharp downturn, falling nearly 20% in the past 24 hours to trade around $2,500. The drop comes in response to President Donald Trump’s announcement of new trade tariffs on Canada, Mexico, and China, which has sparked broader market uncertainty.
The price movement represents one of the most severe sell-offs in recent years for the leading alternative cryptocurrency, pushing it below the critical $3,000 support level. The decline coincides with a broader market reaction to Trump’s decision to implement 25% tariffs on imports from Canada and Mexico, along with 10% tariffs on Chinese products.
Data from Coinglass reveals that panic selling among large holders has played a crucial role in the market downturn. Whale activity has triggered a cascade of liquidations, resulting in the largest Ethereum liquidation event in over two years.
The scale of the liquidation event has been particularly notable, with $475.72 million liquidated from long positions and an additional $127.78 million from short positions over the past 24 hours. The futures market has also seen a 27% reduction in open interest, dropping to $23.36 billion.
Despite the market turbulence, some analysts maintain an optimistic outlook. Crypto trader MaxBecauseBTC, who has 66,000 followers on X, compared the current situation to the March 2020 COVID crash, suggesting that “those that stick around will be rewarded.”
Largest liquidation event on $ETH in the past 2+ years with the most negative funding… most comparable event to this was March 2020 Covid Crash.
I believe those that stick around will be rewarded. Most will not stick around. Defining moment for many. We all go through it. pic.twitter.com/hmZRGuGJAo
— Max (@MaxBecauseBTC) February 3, 2025
Felix Hartmann, founder of Hartmann Capital, attributes the downturn to “forced selling” and suggests current prices may not reflect true market value. This sentiment is echoed by Mechanism Capital partner Andrew Kang, who indicates that Ethereum may be oversold and could recover to $2,700.
The market reaction appears closely tied to developments in Asian financial markets. Hong Kong’s Hang Seng index dropped 2.07%, while Japan’s Nikkei 225 index fell 2.27%. South Korea’s KOSPI index experienced a 2.87% decline, and Taiwan’s weighted index showed a 3.74% decrease.
Amid the market turmoil, some positive signals have emerged. On-chain data shows that investors have withdrawn $326.7 million worth of ETH from exchanges over the past three days, suggesting accumulation during the dip. This behavior typically indicates that some investors view the current prices as a buying opportunity.
Whale activity has also shown signs of confidence in the market. According to Onchain Lens, a single whale purchased 35,494 ETH, valued at nearly $88 million, following the price decline. Another whale was reported to have invested an additional $1 million in ETH during the dip.
Technical indicators present a mixed picture for Ethereum’s short-term prospects. The cryptocurrency has moved below both its 50-day and 200-day moving averages, suggesting a bearish trend. However, the Relative Strength Index shows oversold conditions, which could indicate potential price stabilization.
The Aroon indicator currently shows a reading of 100% for Aroon down and 0% for Aroon up, suggesting the possibility of continued downward pressure in the immediate term. However, historical patterns suggest that assets typically experience bullish reversals after reaching oversold conditions.
TYMIO founder Georgii Verbitskii suggests that Ethereum could see a short-term bounce toward $2,700, driven by technical factors and temporary relief in market sentiment. However, he notes that without strong catalysts, Ethereum may continue to show weakness against Bitcoin.
The tariffs are scheduled to take effect at 12:01 a.m. EST on Tuesday, and market participants are closely watching diplomatic discussions between the United States and affected countries for any signs of resolution.
As of press time, Ethereum trades at $2,500, with 24-hour trading volume reaching $86.7 billion. The total market capitalization stands at $313.3 billion, reflecting the impact of recent market movements.
The post Ethereum (ETH) Price: Tests $2,500 Support Level Amid International Trade Tensions appeared first on Blockonomi.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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