Ethereum's Turbulent Week: Macroeconomic Pressures Drive Price Swings

Ethereum, alongside the broader cryptocurrency market, experienced significant price volatility this week, marked by sharp dips and subsequent rallies. This turbulence was largely driven by a confluence of macroeconomic factors, including the temporary reinstatement of Trump-era tariffs, substantial market liquidations, and stalled US-China trade negotiations, creating widespread uncertainty among investors.

Ethereum Faces Significant Downturn

The cryptocurrency market faced a challenging period, with Ethereum (ETH) experiencing notable declines. ETH slid approximately 3.8% to trade around $2,621 at one point, and later dipped to $2,553.101, marking a 3.41% loss. This mirrored a broader market sell-off that saw Bitcoin (BTC) fall below $105,000 and other major cryptocurrencies like XRP, Solana (SOL), and Dogecoin (DOGE) also suffer substantial losses. The total cryptocurrency market capitalization plummeted by 2.6% to $3.34 trillion.

• Key Takeaways:Ethereum saw significant price drops, mirroring Bitcoin and other major altcoins.The market downturn was widespread, affecting the total crypto market capitalization.External macroeconomic factors were primary drivers of the volatility.

Macroeconomic Factors Fuel Market Uncertainty

Several interconnected factors contributed to the market's downturn:

• Reinstated Trump Tariffs: A U.S. appeals court temporarily revived President Donald Trump’s controversial tariffs, injecting uncertainty into markets already grappling with inflation and geopolitical instability. This legal back-and-forth was cited as a direct cause for Bitcoin and Ethereum's initial dips.

• Massive Liquidations: Over $800 million in crypto futures positions were liquidated within 24 hours, with long positions accounting for the vast majority ($747 million). Ethereum alone saw nearly $122 million in liquidations, highlighting the extent of overleveraged bullish bets.

• Bitcoin ETF Outflows: U.S. spot Bitcoin ETFs ended a 10-day streak of net inflows, recording $347 million in net outflows. This institutional selling pressure added to the bearish sentiment across the crypto market.

• Stalled US-China Trade Talks: Confirmation that trade negotiations between the US and China had stalled dampened investor sentiment, triggering risk-off behavior across global markets and impacting cryptocurrency prices due to their correlation with risk assets.

Ethereum's Resilience And Future Outlook

Despite the immediate pressure, analysts maintain a cautiously optimistic outlook for Ethereum. While ETH faced rejection at major resistance levels and technical indicators suggested potential further downside, its monthly candle closed strongly bullish after five consecutive months of weakness, signaling a potential broader trend reversal.

Crypto analyst CRYPTOWZRD noted that holding above the $2,604 resistance level could trigger further upside for Ethereum. Analysts also suggest that such corrections often precede significant rallies, particularly when driven by external factors rather than fundamental cryptocurrency issues. Medium-term price predictions for Ethereum remain bullish, with expectations of a range between $2,700 and $2,900 in June 2025, provided market conditions stabilize.

Sources

• Bitcoin, Ethereum Dip as Trump Tariffs Back on the Table, Decrypt.

• Why Is Crypto Going Down? Bitcoin, Ethereum, XRP & Dogecoin Prices Are Falling Today, Finance Magnates.

• Ethereum Joins Bitcoin In The Red – Volatility Looms Ahead, Bitcoinist.com.

• Crypto Liquidations Spike Above $800 Million as Bitcoin, Dogecoin and Ethereum Fall, Decrypt.