Ethereum’s price retreated and lost some of its earlier gains on Thursday amid ongoing trade concerns.
Ethereum (ETH), the second-largest cryptocurrency, fell to $1,560, down from an intraday peak of $1,700. Other prominent altcoins like Zcash (ZEC), Tezos (XTZ), and EOS (EOS) also receded from their highs. Bitcoin’s value decreased from $82,000 to $80,000.
The decline in Ethereum and these altcoins was mirrored by a broader downturn in the stock market, with the Dow Jones and Nasdaq 100 indices dropping by 950 and 650 points, respectively.
The main factor behind this decline is the increasing apprehension that the US might be on the brink of a recession, even after Donald Trump put a hold on some of his Liberation Day tariffs.
In a statement on X, Mark Zandi, the chief economist at a major ratings agency, expressed concern about a 60% likelihood of the US entering a recession this year. Zandi’s insights are particularly noteworthy, given that he is recognized as one of the leading economists in the nation.
Zandi pointed to the intensifying trade conflict between the US and China, noting that both nations have ramped up tariffs. Imports from China are now facing a 125% tariff, while US exports to China incur an 85% tariff. This is significant, considering both countries are among the biggest trading partners in the world.
He also noted that the US has a 10% tariff on goods imported from other countries, with certain industries, such as automobiles, steel, and aluminum, facing tariffs of 25%. Consequently, Zandi estimates the effective tariff rate in the US to be around 20%, which is considerably higher than that of many other nations.
Technical Analysis of Ethereum Price
The weekly chart indicates that Ethereum remains in a downward trend as fears of a recession loom. This downward movement began after ETH reached a triple-top pattern at $4,065, subsequently breaking below the crucial support level of $2,125, its lowest point since October of the previous year. The price also fell beneath the ascending trendline established by swing lows since June 2022.
Both the Relative Strength Index and the MACD indicators are showing a downward trajectory, with the RSI approaching oversold levels. As a result, it’s likely that Ethereum’s price will continue to decline, with sellers aiming for the next psychological target of $1,000.