Ethereum (ETH) has taken a brutal hit, plunging 15% to $2,000—its lowest level since November. The sharp breakdown shattered key support levels as whale-driven sell-offs erased all post-election gains. Even the expected boost from Ethereum’s inclusion in strategic reserves failed to counter the market downturn, with ETH ETFs bleeding a staggering $51.36 million.
A whale wallet with over 110K $ETH($235M) appears to be selling $ETH.
— Lookonchain (@lookonchain) March 4, 2025
In the past 14 hours, this wallet has transferred 30,000 $ETH($68.55M) to #FalconX and #GalaxyDigital and received 7.76M $USDC from #FalconX.
The wallet may be related to #GenesisTrading.… pic.twitter.com/p6Gzb9S4iO
With extreme fear dominating sentiment and sell-side liquidity rising, Ethereum bulls face an uphill battle in defending key levels. If they fail, ETH could slide further to $1,900.
Internal and External Market Forces
Donald Trump’s recent tweet hinting at a ‘potential’ strategic reserve briefly injected optimism into the crypto market, pushing its total market capitalization up 8% to reclaim the $3 trillion mark. However, the rally was short-lived as the market reversed, dropping 10.20% to $2.78 trillion. In a span of 24 hours, $220 billion was wiped out, underscoring the persistent volatility.
While Ethereum’s 15% drop has pushed it into a key demand zone, on-chain data suggests weak buyer interest, casting doubt on an immediate recovery.
Institutional Demand Weakens as Sell Pressure Mounts
The Coinbase Premium Index (CPI) remains negative, signaling tepid institutional demand from U.S. investors. Additionally, rising Ethereum exchange reserves and a 5.50% decline in trading volume indicate continued sell pressure. With dip-buying absent, Ethereum remains vulnerable to further downside unless demand equilibrium is restored.
Market Liquidity and Sentiment Drive Further Risk
Ethereum’s crash triggered $168.13 million in long liquidations, exacerbating sell-offs. This followed a $2 billion influx in new positions, which had temporarily pushed Open Interest (OI) up by 10% to $21.11 billion. However, rapid de-leveraging soon followed, causing an 8.39% drop in OI as traders exited positions to either mitigate losses or secure profits.
With thinning liquidity and aggressive sell-offs, Ethereum’s downside risk remains significant. Broader market sentiment will play a crucial role in determining the next move. If Bitcoin sees strong accumulation, ETH could stabilize. However, with ongoing de-leveraging and weak bid-side liquidity, a drop to $1,900 remains the most probable scenario.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
Also Read: Ethereum Drops 33% as Institutional Sell-Off Intensifies
