The price of Ether (ETH) has fallen by more than 11.75% over the past day, settling around $1,900. At its lowest point during the day, the cryptocurrency dipped to $1,755, marking its lowest value since October 2023.
ETH/USD four-hour price chart.
Several elements seem to be driving the decline in ETH’s price, including:
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Concerns regarding a potential recession in the US and its effects on risk-oriented markets.
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Significant long liquidations within the cryptocurrency market.
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ETH-backed crypto loans at risk of liquidation.
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Bearish technical indicators.
Ether price drops alongside risk assets
The continuous decrease in Ether’s price reflects similar trends across risk assets as unfavorable macroeconomic conditions prevail.
Key insights:
TOTAL crypto market cap versus Nasdaq, Dow Jones, S&P 500, and US 10-year Treasury note yields – four-hour chart.
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JPMorgan has raised the risk of a US recession in 2025 to 40%, up from 30%, attributing this to US political policies deemed extreme.
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Goldman Sachs has also increased its 12-month recession likelihood to 20%, up from 15%.
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In early March, tariffs of 25% were placed on goods from Mexico and Canada, alongside a 10% tariff on imports from China.
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Retaliatory tariffs from Canada and Mexico on US goods were announced, escalating trade tensions and raising the specter of a trade war.
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China has already responded by imposing increased tariffs on several US products and placing restrictions on 25 US companies.
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These tariffs are likely to drive up consumer prices and further contribute to inflation in the US.
Fears of a recession in the US are adversely affecting Ethereum and the broader crypto market, specifically:
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Historical trends show that Ether, Bitcoin, and other leading cryptocurrencies tend to decline during economic downturns, as seen during the Covid-19 sell-off in March 2020.
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As of March 11, the correlation over the past year between the crypto market and the S&P 500 index was registered at 0.69.
TOTAL crypto market cap versus S&P 500’s 52-week correlation coefficient.
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A consistently high correlation suggests that if US stocks continue to decline, the crypto market is likely to follow suit, especially as the trade conflict prolongs.
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Bond market participants predict no need for an interest rate cut before June, with data indicating strong probabilities for pauses in the Fed’s March and May meetings.
Probability targets for the Fed’s March meeting.
Increased pressure from poor DeFi loans on Ether
A DeFi loan of $74 million on the Sky protocol, secured by $130 million in ETH, faced a close call with liquidation as Ether’s price dipped below the liquidation threshold just above $1,900.
What unfolded:
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The borrower added $34 million in ETH as collateral to prevent liquidation.
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Withdrew $1.6 million in USDT from Binance, exchanged it for DAI, and placed it into Maker.
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Reduced the debt to $73.1 million, although ETH’s price continued to decline.
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The liquidation threshold remained at $1,836 per ETH, aligning closely with ETH’s current price above $1,900.
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Approximately $353 million in debt is currently tied to similar loans, which risks liquidation if ETH’s price falls by another 20%.
Ethereum liquidation levels in DeFi.
Long positions’ liquidation fuels ETH’s downward trend
The recent drop in Ether’s price over the last day coincided with a significant wave of long position liquidations, compelling traders to close their leveraged trades.
Key takeaways:
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In the past 24 hours, more than $240 million of ETH positions were liquidated, with long positions making up $196.27 million, or 82% of that total.
Total liquidation chart for ETH.
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This sharp decline in price precipitated a series of forced sell-offs as traders who were betting on Ethereum’s upward movement faced liquidation.
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When leveraged long trades cannot meet margin requirements, exchanges will automatically sell assets to cover losses.
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These liquidations can further accelerate price drops, deepening the market downturn.
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The wider cryptocurrency market also witnessed a major deleveraging event, with total liquidations hitting $897.26 million across various assets.
Crypto market liquidations over the last 24 hours.
Ether may decline further toward $1,700
From a technical viewpoint, the ongoing price reduction of Ether is part of an inverse cup-and-handle (IC&H) pattern.
Key points to note:
ETH/USD daily price chart.
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A temporary consolidation (handle) around $2,700 indicates a failed breakout attempt.
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ETH has shattered crucial support levels, confirming the IC&H breakdown and leading to further losses.
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The target move from this pattern suggests a potential decline toward $1,700, aligning with significant support levels.
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The 50-day EMA ($2,600) and 200-day EMA ($2,929) remain significantly above, further reinforcing the bearish sentiment.
Key levels to monitor:
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ETH has been trading within a descending channel pattern since late February.
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As of March 11, the ETH/USD pair showed signs of rising after testing the lower trendline of the channel as a support level.
Four-hour ETH/USD price chart.
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Previous rebounds have led to prices approaching the channel’s upper trendline.
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If this pattern repeats itself, the next upside target for ETH could hover around $2,000, in line with the 0.236 Fibonacci retracement level.
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A reversal from the current price could lead ETH to test the IC&H downside target of $1,700.
This article does not provide investment advice or recommendations. All investment and trading decisions carry risks, and readers should perform their own due diligence before making any decisions.