Why is the price of Ethereum dropping? When Will the Ethereum Price Rebound?
As the Bitcoin (BTC) price strives to follow gold’s parabolic ascent, the Ethereum (ETH) price has maintained a relentlessly pessimistic outlook. The large-cap altcoin, with a fully diluted valuation of over $228 billion and a 24-hour average trading volume of around $19 billion, has been stuck in a multi-week downturn.
Since US President Donald Trump’s second inauguration, the Ethereum price has fallen below two critical support levels: $3,200 and $2,200. Ether’s price has decreased by more than 33% in the last three weeks, reaching at $1,891 on Friday, March 14, during the early European trading period.
Ethereum Whales Purchase the Capitulation-Fear
As major stock indexes, led by the S&P 500, continue to fall amid increased mid-term uncertainty caused by the United States’ tariff conflicts, long-term traders and institutional investors have continued to seek safety in the gold and stablecoin markets.
According to Glassnode’s on-chain analytics, long-term Ether holders are extremely concerned. Meanwhile, the U.S. spot Ether ETF issues are likely to see their third consecutive week of capital outflows, following a net outflow of approximately $73 million on Thursday.
Is the bottom yet in?
Ethereum’s price has been heavily negative over the last year, with a heightened resistance level of roughly $4,000. According to technical research, the ETH/USD is much oversold compared to Bitcoin.
As a result, Ether’s price must rebound from its current support level in order to avoid additional fall to $1.5k in the next weeks. Furthermore, the ETH/BTC pair has been retesting a critical support level of roughly 0.023 over the last week, which could fuel bullish sentiment in the immediate term.
Silver Lining
The Ethereum network remains unrivalled in the decentralized financial (DeFi) sphere, with a total value locked (TVL) of over $45 billion and a stablecoin market valuation of more than $123 billion. In order to remain competitive in the face of increased acceptance of alternative layer one (L1) chains led by Solana (SOL), Ethereum core developers are preparing to release the Pectra update soon.
On Thursday, Tim Beiko, a core developer at the Ethereum Foundation, said that the team will deploy the third testnet, Hoodi, to better prepare for the Pectra upgrade by at least mid-April 2025.