Why Did Ethereum Crash, and How Low Can the Eth Price Drop?

The cryptocurrency market has been on a wild ride for the past few days, with Ethereum (ETH) and Bitcoin (BTC) leading a dramatic downturn. Since Friday, the market has shed over $500 billion in value, leaving investors wondering what’s next. As of Monday, February 3, the market’s total valuation is hovering around $3.16 trillion, but the losses don’t stop there—over $2.1 billion was liquidated in just the past 24 hours.

Bitcoin has dropped by more than 10% in the past two weeks, now testing a crucial support level just above $91k. Ethereum has experienced a steeper drop, losing more than 30% over the same period and retesting a critical support level around $2,136.

Could this be the start of something bigger? Let’s dive in.

Did Trump Crash the Crypto Market?

The recent downturn in the crypto market is closely tied to Donald Trump Donald Trump   Donald J. Trump is a US-based entrepreneur, Pro-crypto Politician, and the 45th and 47th President of the United States of America. He understands the importance and needs of the modern fintech world, and people look up to him as a dominant pro-crypto leader.   Quick Facts   Full name Donald John Trump Birth 14-06-1946, New York, United States Nationality American Education BS from the University of Pennsylvania Known For Businessman, Pro-Crypto Politician   Once doubtful about Bitcoindominance, he said in a tweet in 2019, “I am not a fan of Bitcoin", but now has a significant amount of cryptocurrency holdings in his kitty. He has also signed an Executive Order to establish a Strategic Bitcoin Reserve, which highlights his commitment to the future of cryptocurrency.   Donald Trump - Career Highlights & Events   2016 – Elected as the 45th President of the United States from the Republican Party.   2017 – Signed the Tax Cuts and Jobs Act, impacting investment environments   2019 – Criticized Bitcoin and Libra on X, dubbing them as "not money"   2024 – Campaign signals potential openness to crypto-friendly reforms   2025 –  Elected as the 47th President of the United States from the Republican Party.   A meme coin, $TRUMP, is associated with Donald Trump, which is listed on the Solana blockchain platform. His family also backs World Liberty Financial (WLF), a crypto venture.     President ‘s second term in office. After months of hype leading up to Trump’s inauguration in mid-January, the crypto market has seen a “sell-the-event” scenario. Trump’s trade wars with Canada, Mexico, and China have caused economic strain, leading to retaliation from these nations.

This, in turn, has caused the crypto market to follow the downward trend of major stock indexes, including Dow Futures.

Ethereum Struggles as Whales Panic Sell

A significant reason for Ethereum’s recent price drop is the panic selling by whales. On-chain data reveals that Ethereum’s supply on centralized exchanges has risen to a new 12-month high of nearly 16.2 million, with large holders selling off their Ether in the past 24 hours.

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•   Bitcoin Could Hit $75K by March 2025 Amid Trump’s Trade War, Reveals Data
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Ether’s Support: Will it Hold?

From a technical analysis perspective, Ethereum is now testing an important support zone that needs to hold in the coming weeks to avoid further losses. Crypto analyst Ali Martinez believes that if Ethereum can stay above $2,750, it could trigger a rally beyond $6k as part of the next phase of the macro bull run.

Crypto analyst Benjamin Cowen suggests that Ethereum’s price, compared to Bitcoin and possibly the US dollar, is likely to bottom out once the Federal Reserve ends its Quantitative Tightening (QT) policy. This could mark a turning point for the asset.

As the crypto market faces its most significant challenges in months, investors are left to wonder if these assets will recover or continue their downward slide.

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