Ethereum’s recent price drop has intensified worries about a potential deeper correction as the cryptocurrency fell significantly within a single day, breaking key support levels. This decline unfolded alongside a wider selloff in the crypto market, which saw total capitalization drop substantially amid fears of tighter U.S. monetary policy prompted by stronger jobs data.
The selloff pulled Ethereum below its first downside target, with technical analysts now eyeing a critical next support level substantially lower than current prices. One prominent analyst identified $1,070 as a potential target on the weekly chart, suggesting that failure to hold above intermediate support zones could spark a prolonged bearish phase for the asset.
Market sentiment worsened as Bitcoin liquidations surged past $400 million within 24 hours, adding pressure to risk assets across the board. The crypto Fear and Greed Index sunk to an extreme fear level, reflecting heightened caution among traders, especially toward Ethereum and other altcoins. This environment reduces appetite for speculative buying and may prolong the current downtrend.
Adding fuel to the bearish outlook, a significant transaction was detected from a wallet linked to Ethereum co-founder Joseph Lubin. After remaining inactive for more than three years, the wallet moved 80,001 ETH, valued at over $121 million at the time of transfer. This activity raised suspicions of potential liquidation or repositioning, which traders perceive as a negative signal amid already weak market momentum. Following the transfer, the wallet retained approximately 243,300 ETH, worth hundreds of millions of dollars.
From a technical standpoint, Ethereum’s recent price recovery after tapping a support zone around $1,500 remains fragile. The Relative Strength Index (RSI) shows oversold conditions, indicating that selling pressure might be easing slightly. However, the MACD indicator remains in negative territory, with the MACD line below the signal line, signaling ongoing downward momentum.
The interplay of technical weakness, macroeconomic uncertainty, and large-scale wallet movements creates a precarious scenario. For Ethereum to regain stability, it must surpass key resistance levels around $2,282, which would help alleviate bearish sentiment and possibly trigger renewed buying interest. Until then, investors remain watchful of further downside risks that could extend the current slump.