Ethereum Price Drops Below $2,000: What's Next?

Ethereum's price has recently experienced a decline, falling beneath the psychological barrier of $2,000 for the first time since March 10, following a period of resilience. This downward movement is part of a larger trend influencing financial markets worldwide, driven by ongoing geopolitical tensions in the Middle East.

Key Takeaways

Ethereum's price has fallen below $2,000, marking a significant decline amid market pressures.
The cryptocurrency saw over $110 million in long liquidations as it hit a two-week low.
Spot Ethereum ETFs experienced net outflows of approximately $158 million, indicating decreased market demand.
Investors are advised to monitor weekend price closures to gauge future movements.

Ethereum price

Increased oil prices resulting from supply disruptions in the Strait of Hormuz have heightened inflation fears across numerous economies. This situation has sparked renewed discussions about a possible increase in interest rates by the United States Federal Reserve, contributing to the dip in cryptocurrency prices.

Long Liquidations Push Ethereum Below Key Support

On March 27, Ethereum's price hit a two-week low just under the $2,000 mark, reflecting struggles within the broader cryptocurrency market. Bitcoin, the largest cryptocurrency by market capitalization, also fell to around $65,500 on that day.

Recent market data reveals that Ethereum's drop below $2,000 resulted in significant long liquidations exceeding $110 million. Given this critical support level's breach, further declines in the coming days may be expected, particularly in the current sluggish market environment.

Investors should pay attention to the Ethereum price as the week concludes. If it convincingly closes below the $2,000 support, there is a heightened risk of further drops, potentially reaching the $1,750-$1,850 support range. As of now, ETH is priced at approximately $1,980, marking nearly a 3% decline within the last 24 hours and over 7% over the past week, according to CoinGecko.

Ethereum ETFs Face Significant Outflows

Examining the recent demand trends for Ethereum, the latest price drop seems almost inevitable. US-based Ethereum spot exchange-traded funds (ETFs) have recorded total net outflows close to $158 million in the past week alone.

These ETFs have experienced a continuous streak of negative outflows, exceeding $400 million total in that time frame. Such persistent low performances reflect a decline in market demand, which in turn affects price movement.

A sustained increase in capital inflows to these products, like spot ETFs, could signal a resurgence in market demand and potentially instigate bullish momentum for Ethereum's price.

Ethereum price The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView