The price of Ethereum (ETH) has fallen sharply, dipping below $2,200, marking a decline that brings it to levels not seen since before former U.S. President Donald Trump announced plans for a strategic cryptocurrency reserve that was expected to include Ethereum.
JUST IN: Ethereum $ETH has lost ALL of its gains from yesterday’s crypto reserve announcement Like it never happened pic.twitter.com/s1o3jMOLJi
— BlockNews (@blocknewsdotcom) March 3, 2025
This dramatic downturn has led to a decline of over 13% in the current trading session, catching many investors by surprise with such a rapid shift in sentiment.
Concerns over the broader economic environment were prominent on Monday, with analysts pointing to possible threats to U.S. economic growth stemming from D.O.G.E austerity measures and ongoing trade tensions initiated during Trump’s presidency. Additionally, uncertainty around the Federal Reserve’s response to a potential economic downturn looms large.
The Atlanta Fed’s GDPNow indicator, which estimates U.S. economic growth based on recent data, has notably dropped to -2.8% for the first quarter of 2025.
Atlanta Fed’s GDPNow index forecasts U.S. economy to plunge -2.8% in first quarter. pic.twitter.com/g34ecKNuZJ
— NewsWire (@NewsWire_US) March 3, 2025
Traders who engaged in buying frenzy over the weekend are now facing significant losses. According to data from Coinglass, approximately $78 million in leveraged ETH futures long positions were liquidated within the last 12 hours.
Moreover, speculation about market manipulation and insider trading has further undermined trader confidence following a brief rally spurred by the announcement.
Corruption, insider trading, rug pulls. I’ve been saying it. America is in its scam era. It’s going to implode soon enough. https://t.co/li2sIXGU1G
— Fred Lambert (@FredericLambert) March 2, 2025
Significant movements in trading patterns were noted, particularly around the time of the Trump announcement, when one trader established a $200 million long position on Bitcoin (BTC) using 50x leverage, earning a profit of $6.8 million.
Additionally, observers on social media highlighted that the cryptocurrencies mentioned by Trump, including Bitcoin, Ethereum, Solana, XRP, and Cardano, constitute the top holdings in Bitwise’s 10 crypto index fund, which is associated with White House Crypto Czar David Sack.
The question arises: Could an impending economic crisis and suspicions of insider trading pressure ETH to new lows in 2025? Furthermore, has the favorable trend that began in late 2022 reached its conclusion?
What Lies Ahead for Ethereum’s Price?
Current concerns surrounding the economic landscape pose a significant risk to the immediate outlook for major cryptocurrencies, suggesting that Ethereum may be preparing for further declines in the short term.
What could the worst-case scenario entail? If the U.S. economy enters a recession and the Federal Reserve delays its response, Ethereum might experience a downfall toward the $1,500 mark.
Does this mean it’s the end of the road for Ethereum?
Not necessarily. An economic downturn is likely to induce volatility in the near term, but it could also prompt substantial stimulus initiatives from the Federal Reserve and the U.S. government, similar to events in 2020/2021, which could subsequently ignite a significant rally in the crypto market.
With the added potential for heightened institutional and national interest in major cryptocurrencies, alongside the anticipation of a U.S. strategic reserve, the groundwork could be laid for a pronounced upward shift in prices.
Factors such as zero interest rates, quantitative easing, renewed fiscal stimulus, and significant purchases by both government and institutions could drive Ethereum’s price to unprecedented levels, potentially exceeding $5,000 in the coming years.
Investors may find value in actively purchasing during market dips and holding their positions through periods of volatility to seize potential future gains.
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