Why is Ethereum (ETH) price down today?

Ether (ETH) price declined by over 11.75% in the last 24 hours to around $1,900. At its intraday low, the cryptocurrency was trading for $1,755, its lowest price since October 2023.

Several factors appear to be contributing to ETH price losses, including:

• US recession fears and its overall impact on risk-on markets.

• Massive long liquidations in the crypto market.

• Crypto loans backed by ETH as collateral facing liquidation risks.

• Bearish technicals.

Ether price declines with risk-on assets

Ether’s ongoing price drop mirrors similar declines in the broader risk-on market due to unfavorable macroeconomic conditions.

Key points:

• JPMorgan raised US recession risk to 40% for 2025, up from 30%, citing US President Donald Trump’s “extreme US policies” as a key risk factor.

• Goldman Sachs also raised its 12-month recession probability to 20%, up from 15%.

• Earlier in March, Trump imposed 25% tariffs on all goods from Mexico and Canada, and 10% tariffs on Chinese imports.

• Canada and Mexico have announced intentions to impose retaliatory tariffs on US goods, escalating trade tensions and raising concerns about a potential trade war.

• Meanwhile, China has already retaliated by increasing tariffs on multiple US products and imposing export controls and investment restrictions on 25 US firms.

• These tariffs are expected to increase consumer prices and contribute to US inflation.

US recession fears are impacting Ethereum and the crypto sector, notably:

• Ether, Bitcoin, and other top-ranking crypto assets have historically declined during periods of economic turbulences, e.g., the Covid-19 sell-off in March 2020.

• As of March 11, the 52-week correlation between the crypto market and the US benchmark index, the S&P 500 index, was 0.69.

• A consistently positive correlation increases the odds of a crypto market decline if US stocks keep falling, especially as the trade war drags on further.

• Bond traders see no need for a rate cut before June, with CME data showing 95% and 52.5% odds of a pause in the Fed’s March and May meetings, respectively.

Bad DeFi loans increase Ether sell-off pressure

A $74 million DeFi loan on the Sky protocol, collateralized with $130 million in ETH, almost got liquidated after Ether price fell below the liquidation level just above $1,900.

As it happened:

• The borrower added $34 million in ETH as collateral to avoid liquidation.

• Withdrew $1.6 million in USDT from Binance, swapped it for DAI, and deposited into Maker.

• Reduced debt to $73.1 million while ETH’s price continued to decline.

• Liquidation level remained at $1,836 per ETH, closer to ETH’s current price above $1,900.

• Nearly $353 million in debt is tied to such loans, risking liquidation if ETH’s price falls 20% from here.

Long liquidations accelerate ETH downtrend

Ether’s tumble over the past 24 hours coincided with a wave of long liquidations that forced traders to exit their leveraged positions.

Key takeaways:

• Over $240 million worth of ETH positions were wiped out in the last 24 hours, with long liquidations accounting for $196.27 million, or 82% of the total.

• The sharp price drop triggered a cascade of forced sell-offs as traders betting on Ethereum’s price increase were liquidated.

• When leveraged long positions fail to maintain margin requirements, exchanges automatically sell off their holdings to cover losses.

• Such liquidations accelerate price declines, exacerbating the downturn.

• The broader crypto market also experienced a sharp deleveraging event, with total liquidations reaching $897.26 million across assets.

Ether eyes further decline toward $1,700

From a technical perspective, Ether’s price decline today is part of its prevailing inverse-cup-and-handle (IC&H) pattern.

Key points:

• A temporary consolidation (handle) formed near $2,700, indicating a failed breakout attempt.

• ETH broke below key support levels, confirming the IC&H breakdown, leading to more losses.

• The measured move target from the pattern suggests a potential decline toward $1,700, aligning with the dotted support level.

• The 50-day EMA ($2,600) and 200-day EMA ($2,929) remain far above, reinforcing bearish sentiment.

Key levels to watch:

• ETH price is inside a descending channel pattern since late February.

• As of March 11, the ETH/USD pair was rising after testing the channel’s lower trendline as support.

• Such rebounds have taken prices toward the channel’s upper trendline in recent history.

• If the fractal repeats, ETH’s next upside target could be around $2,000, aligning with the 0.236 Fibonacci retracement line.

• A reversal from current price levels could have ETH test the IC&H downside target of $1,700.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.