 ▲ Ethereum (ETH) |
Ethereum (ETH) plunged after losing the $2,000 level, a strong psychological support line, heightening fears of further declines and the risk of large-scale liquidations in the market.
According to cryptocurrency-focused outlet NewsBTC on February 28 (local time), investor sentiment rapidly deteriorated as Ethereum fell below the key $2,000 support range. Significant capital outflows from spot Ethereum ETFs were identified as a decisive factor behind the price drop. In particular, sell-offs from Grayscale’s Ethereum Trust overwhelmed market liquidity and intensified downward pressure.
On-chain data analytics firm Santiment reported that large whale investors have been moving substantial holdings to exchanges and aggressively selling. As open interest within the Ethereum network sharply declined, a wave of forced liquidations of long positions triggered a chain reaction that swiftly drove prices lower. Although the Relative Strength Index (RSI) entered oversold territory, buying interest failed to materialize, leaving downward pressure unresolved.
Market experts assessed that macroeconomic uncertainty combined with a broader downturn in the cryptocurrency market has diminished Ethereum’s appeal as a store of value. Investors have been reducing exposure to risk assets and shifting funds into safer assets, during which Ethereum has recorded significant losses from its recent highs. Indicators such as gas fees and transaction volumes, which reflect network activity, have also declined, indicating that ecosystem growth has temporarily stalled.
Currently, Ethereum is attempting to establish new support around the $1,800 level, but strong downside momentum makes it premature to feel assured. Warnings are growing that volatility could further increase as major derivatives expiry dates approach. Unless institutional demand for spot Ethereum ETFs recovers, it may be difficult to lay the groundwork for a price rebound.
The breakdown below $2,000 signals structural changes across the broader market and underscores the need for thorough risk management among investors. Selling pressure following the breach of key support levels is likely to persist for the time being, and market participants are reviewing portfolio adjustments in preparation for potential further declines. Despite the Ethereum ecosystem’s long-term value, its resilience against short-term downside pressure is now being put to the test.
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