Ethereum experienced a sharp decline yesterday as the broader cryptocurrency market tumbled. ETH prices dropped over 9% in just a few hours, shaking investor confidence and raising concerns about a potential deeper correction. The sudden downturn has sparked fear across the U.S. markets, adding to the uncertainty that has gripped the crypto space this Monday morning.

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Top crypto analyst Carl Runefelt shared a technical analysis on X, shedding light on Ethereum’s precarious position. According to Runefelt, Ethereum might test the $2,800 support level if the market continues its downward trajectory today. This key level could serve as a critical juncture for ETH, as losing it might lead to further declines and heightened selling pressure.

Market sentiment has taken a hit, with many investors bracing for increased volatility in the days ahead. Analysts are closely monitoring macroeconomic indicators and broader market movements to gauge the potential impact on Ethereum’s price action. As ETH hovers around pivotal support zones, the next 24 to 48 hours will be crucial in determining whether the cryptocurrency can regain momentum or face a deeper correction. Investors are urged to tread cautiously as the market navigates this volatile phase.

Ethereum Faces Intense Selling Pressure 

Ethereum has been under significant selling pressure since late December, reflecting the heightened volatility that has gripped the broader cryptocurrency market. Analysts and investors are increasingly bearish, with sentiment suggesting that ETH may continue to decline in the coming days. This challenging phase has raised concerns about the asset’s near-term prospects, leaving many market participants on edge.

Top crypto analyst Carl Runefelt shared his technical analysis on X, highlighting a critical support level for Ethereum. Runefelt predicts that ETH might reach the $2,800 support level if the current market downturn persists. This key level could be a strong foundation for a potential recovery or signal further weakness if broken.

Despite the bearish sentiment, some investors and traders see this potential drop as an opportunity. Ethereum remains one of the most prominent cryptocurrencies, and many believe it is still poised for significant gains this cycle. A correction to $2,800 could provide an attractive entry point for those confident in Ethereum’s long-term fundamentals and growth potential.

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As the market continues to navigate this uncertain period, all eyes are on Ethereum’s price action. Whether it holds at critical support or succumbs to additional selling pressure will play a crucial role in shaping its trajectory in the weeks ahead.

Price Holds Above Critical Support

Ethereum (ETH) is currently trading at $3,050, maintaining a position just above the 200-day moving average, which stands at $2,988. The 200-day moving average is widely regarded as a long-term indicator of strength, and holding above this level could signal a potential reversal of the ongoing downtrend.

The market is watching closely to see if Ethereum can maintain this critical support, as it could mark the beginning of a recovery phase. Analysts highlight that staying above the 200-day moving average is essential to building bullish momentum and restoring investor confidence in the short term.

However, holding support is only the first step. To confirm a trend reversal and establish a stronger bullish outlook, Ethereum must reclaim the $3,300 resistance level. This would indicate that buyers have regained control, potentially paving the way for further upside.

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On the flip side, losing the $2,988 level could lead to increased selling pressure, with the possibility of ETH testing lower support levels. As the market navigates this pivotal moment, the coming days will be crucial in determining whether Ethereum can sustain its current levels and make a push toward reclaiming higher ground. For now, traders and investors remain cautiously optimistic.

Featured image from Dall-E, chart from TradingView

US president-elect Donald Trump is already taking proactive steps in the crypto industry to begin his administration, starting with Ethereum. First was the launch of his meme token on Solana and the endorsement of Melania Trump’s meme token on social media platform X. Behind the scenes, World Liberty Financial, a crypto venture affiliated with Donald Trump and some of his family members, has taken a major step toward Ethereum. On-chain transaction data reveals that the DeFi company recently converted a $20 million worth of USDC into 6,041 ETH, purchasing the tokens at a rate of $3,311 each.

From Solana To Ethereum

The launch of the Official Trump meme token on the Solana blockchain caught many in the crypto community off guard and it served as a nod to Solana’s increasing prominence in the blockchain space. Particularly, this move highlighted Solana’s rising prominence and its growing edge over Ethereum as a preferred blockchain for launching meme coins and smart contracts. Notably, Solana-based meme tokens have gained significant traction in the current market cycle, contrasting with Ethereum-based meme coins and utility cryptocurrencies, which dominated during the 2021 crypto bull market.

Furthermore, Ethereum was considered Donald Trump’s blockchain of choice due to its significant allocation within World Liberty Financial’s portfolio. This is because World Liberty Financial had already purchased millions of dollars worth of ETH. Interestingly, the DeFi company also has a substantial amount of Chainlink and Aave in its portfolio, which are two other Ethereum-based cryptocurrencies.

However, the recent transaction shows that Donald Trump might still be proactive on ETH. The transaction saw World Liberty utilize $20 million USDC to acquire 6,041 ETH, despite Ethereum’s underperformance in the current market cycle when compared to other large market cap cryptocurrencies. Interestingly, this brings the total ETH purchase to $47 million worth of ETH in the past 24 hours.

According to data from Arkham Intelligence, World Liberty’s crypto portfolio is valued at $276.4 million, with Ethereum making up the largest share. Specifically, World Liberty holds 39,000 ETH worth $128 million, which is a clear indication of its faith in Ethereum’s value proposition.

Beyond ETH, the portfolio includes significant allocations to stablecoins, with $78.55 million in USDT and $62.32 million in USDC. Additionally, World Liberty holds $1.97 million in Aave, $1.91 million in Chainlink, $1.80 million in Wrapped Bitcoin (WBTC), and $818,460 in Wrapped Ethereum (WETH), among many other altcoins. Surprisingly, World Liberty doesn’t hold any Solana.

ETH’s Price And Market Sentiment

As mentioned, Ethereum’s performance this cycle has been underwhelming compared to early expectations in the beginning of this cycle as the largest altcoin.  Particularly, the king of altcoins has yet to break substantially and hold above the $4,000 price mark.

Nonetheless, significant investments like this can go a long way in rebuilding a positive sentiment surrounding ETH and increase buying interest from retail and institutional investors.

At the time of writing, ETH is trading at $3,310.

Featured image from Medium, chart from Tradingview.com

Ethereum continues to underperform in the ongoing bull market cycle as the crypto asset records another bearish month, raising concerns about its potential to go parabolic in the short term. However, the month of February presents another chance for ETH to grow due to its notable performance in the month over time.

February Likely To Trigger Gains For Ethereum

In spite of bullish expectations in January, Ethereum has failed to produce a major price surge, with hopes now shifted toward February. While January has been underwhelming for ETH, February boasts of significant returns.

Market expert and investor Daan Crypto Trades contends that ETH is poised for potential upward momentum as its historical monthly price trends hint at February being a bullish month for the crypto asset. Looking at past performances, February has recorded gains 7 times out of 8 in the history of ETH.

One interesting thing about this data is the average returns per month. The reoccurring patterns of notable gains during the month are supported by increasing adoption and improving market sentiment.

Data shows that January to May are the best months in ETH’s history. Meanwhile, summer seasons are pretty bad for Ethereum with Bitcoin stealing the spotlight again as the altcoin underperforms during this period.

Even though February has been positive for ETH in the past, Daan Crypto Trades highlighted that traders should not base their decisions solely on historical returns. However, seasonality is a crucial factor in both cryptocurrencies and equities researched and considered by many investors.

Since the upcoming months appear bullish, it is likely that the asset will see a persistent uptrend. This way, Ethereum may gather the necessary momentum to reach a new all-time high in the short term.

Meanwhile, the next key levels to watch are the $4,000 and $4,100 price range as the altcoin gears up for a retest to these targets. Daan Crypto Trades noted that ETH’s upward momentum is testing the upper line of a massive falling wedge pattern. 

Thus he believes another retest to these levels is probable once the altcoin breaks out of the pattern. At the price range, the analyst expects ETH to face a major setback, urging investors to monitor the trend closely.

ETH’s Undergoes A Strong Pullback

ETH has taken a major hit as bearish pressure mounts across the entire market, causing a drop close to the $3,000 mark. Data from CoinMarketCap shows that the altcoin has fallen by nearly 9% in the last 24 hours.

This sudden pullback has triggered fear and uncertainty within the community. Nonetheless, investors continue to demonstrate confidence in ETH as they persistently accumulate the altcoin amid recent volatility. 

In the past day, its trading volume has increased by more than 120%. Historically, heightened buying pressure has served as a precursor for an upswing. Should this strong investor sentiment hold, Ethereum might undergo a rebound shortly.

Featured image from Adobe Stock, chart from Tradingview.com