Why is Ethereum lowering prices today?

Ether (ETH) prices have fallen by more than 11.75% in the past 24 hours to around $1,900. At Intray Low, cryptocurrency was trading at $1,755, the lowest price since October 2023.

It appears that there are several factors contributing to the loss of ETH prices, including:

The fear of the US recession and its overall risk-on market impact.

Large long liquidation in the crypto market.

ETH-backed cryptocurrency is a collateral that faces liquidation risks.

Bearish technology.

Ether prices drop with risk-on assets

Ether's continued price drop reflects a similar decline in the wider risk-on market due to adverse macroeconomic conditions.

Key Points:

JPMorgan raised the risk of a 2025 recession to 40% in 2025, citing US President Donald Trump's “extreme US policy” as a key risk factor.

Goldman Sachs also increased the odds of a 12-month recession to 20%, up from 15%.

At the beginning of March, Trump imposed a 25% tariff on all goods from Mexico and Canada, and a 10% tariff on Chinese imports.

Canada and Mexico have announced their intention to impose retaliatory tariffs on US goods, raise trade tensions and raise 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 companies.

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

The fear of the US recession is affecting Ethereum and the crypto sector.

Ether, Bitcoin and other top-ranked crypto assets have historically declined during periods of economic turbulence, including the sale of Covid-19 in March 2020.

As of March 11th, 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 likelihood of a decline in crypto markets, especially as US stocks continue to decline, especially as the trade war drags further.

Bond traders believe there is no need to cut fees before June, and CME data shows odds of 95% and 52.5% at the Fed's march and May meeting, respectively.

Bad loans increase ether sales pressure

The $74 million Defi loan at Sky Protocol was secured with a $130 million ETH and was mostly liquidated after Ether prices fell below the liquidation level above $1,900.

As it happened:

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

I withdraw $1.6 million from Binance with USDT, exchanged it for Dai, and deposited it with Maker.

ETH prices continued to fall, cutting their debt to $73.1 million.

The liquidation level is $1,836 per ETH, exceeding $1,900 for the current price of the ETH.

If ETH prices fall 20% from here, nearly $353 million in debt is associated with such loans, putting liquidation at risk.

Long liquidation accelerates ETH downward trends

The etheric fall over the past 24 hours coincided with a long wave of liquidation that forced traders to end their leveraged positions.

Important takeouts:

Over $240 million ETH positions have been wiped out in the last 24 hours, with long liquidation accounting for $199 million, or 82% of the total.

A sharp drop in prices has led to a cascade of forced sales as traders betting on Ethereum's price rise.

If the leveraged long position cannot maintain the margin requirements, the exchange will automatically sell its holdings to cover the loss.

Such liquidation will drive prices down and exacerbate the economic downturn.

The broader crypto market also experienced a sudden deletion event, with total liquidation reaching $897.26 million across assets.

Etheric Eyes Decrease to $1,700

From a technical standpoint, today's price drops in ether are part of its common reverse cup and handle (IC&H) pattern.

Key Points:

A temporary integration (handle) formed near $2,700, marking the failure of a breakout attempt.

ETH has fallen below the main support level, checking the breakdown of IC&H, leading to more losses.

The measured moving target from the pattern suggests a potential reduction to $1,700, matching the dotted support level.

The 50-day EMA ($2,600) and the 200-day EMA ($2,929) are far higher, reinforcing bearish feelings.

Important levels to see:

ETH prices have been in the downward channel pattern since late February.

As of March 11, the ETH/USD pair had risen after testing low trendlines on the channel as support.

Such rebounds have taken prices towards the channel's top trendlines in recent history.

If the fractal is repeated, the next upside target in ETH could be around $2,000, matching the 0.236 Fibonacci retracement line.

With a reversal from current price levels, ETH could test IC&H's negative target of $1,700.

This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.