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Ethereum (ETH) has broken below a multi-year ascending triangle, and investors worry about a possibly prolonged downtrend. Recent policy moves by U.S. President Donald Trump add confirmation to this bearish technical signal. His announcement of a U.S. strategic cryptocurrency reserve did not include, then did include, Ethereum aftermarket reaction. The political uncertainty surrounding Ethereum’s status combined with this technical breakdown means that prices are still volatile. Analysts wonder whether ETH will be able to recover or whether it will continue to fall further.
Technical Analysis on Ethereum
An ascending triangle is generally considered a bullish continuation pattern and consists of a horizontal line of resistance and a rising line of support, showing increasing buyer interest. Nonetheless, Ethereum’s price action over the past week didn’t meet this expectation. Rather than break upwards, ETH crumbled down towards the ascent support trendline, which is a sign of a bearish reversal.
This breakdown indicates that the bullish momentum that formed over the course of several years is beginning to fade. Such long-term breaks in trend are indicative of structural shifts in market sentiment and can sometimes mark the beginning of protracted correction periods. Analysts are now looking to lower support levels to see where Ethereum may settle.
The U.S. Crypto Reserve Announcement
On March 2, 2025, President Donald Trump announced plans to create a U.S. strategic cryptocurrency reserve. The initial announcement mentioned inclusion of coins like XRP, Solana (SOL), and Cardano (ADA) while not mentioning Ethereum and Bitcoin. However, its omission caused some heads to turn, prompting speculation about the administration’s position on these leading digital assets.
Hours later, President Trump seemed to fix the earlier omission, confirming that Bitcoin (BTC) and Ethereum (ETH) “will be at the heart of the Reserve.” This sequence of events added to the volatility in the market as investors tried to figure out how to read the government’s evolving policy on crypto.
Bloodbath and Liquidations
These announcements resulted in increased volatility in the cryptocurrency market. Bitcoin fell to around $89,000, its lowest level since mid-January, and Ethereum slumped 11% to $2,333, its lowest since October. These maneuvers occurred amid broader market sell-offs, fueled in part by external factors, including an influential hack of the Bybit exchange, which led to $1.5 billion worth of Ether being stolen.
The selloff caused significant liquidations throughout the market. More than $870 million in crypto positions were liquidated in a 24-hour timespan, where Ethereum alone accounted for more than $530 million in liquidations. Such a cascading effect increased the downward pressure on prices as forced liquidations spurred more selling.
Investor Sentiment Key
Fortunately, the break there from the multi-year ascending triangle has directed attention to important support levels for potentially stopping Ethereum‘s downward drift. The immediate support is seen near $1,950, while the next task to buoy sits at $1,990, and another nontrivial at about $1,450 if this negative feeling persists.
Investor sentiment has been hit by both technical factors and wider economic conditions. Uncertainty over the broader impacts of the ‘U.S. strategic cryptocurrency reserve’ and the immediate and long-term challenges of implementing the recent federal policy announcements weigh on market participants. Further, external economic influences, such as trade tensions and regulatory trends, also remain a considerable driver of market dynamics.
Leading in Uncharted Territory
The recent dip under a crucial multi-year trendline, coupled with mixed signals from the US government on policy, have made investors prepared for anything when it comes to Ethereum. Although technical indicators imply that additional downside is possible, the developing regulatory environment and macroeconomic drivers might further cloud market perspective. Investors are cautioned to remain vigilant, monitoring support levels as well as policy developments that might affect the future path of the cryptocurrency market.
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Frequently Asked Questions
1. Why did ETH lose its long-term trendline?
Additionally, the volatility added to market fear and weak support created a bearish breakdown for the crypto-native currency, which was largely responsible for ETH to go down, as Trump’s initial exclusion from the U.S. Crypto Reserve triggered investor pushback.
2. What market position does ETH have after Trump’s crypto policy?
Exclusion of him at first stirred concerns; inclusion late eased fears We have regulations in the future that will confirm the adoption of ETH as a security, institutional support, and the future stability of ETH.
3. At what level of prices could traders look for recovery?
A few levels to note: $1,990 and $1,450 A bearish governance would intensify if ETH’s below support, yet if lost ground can be reclaimed, recovery potential can be found.
4. Is there hope for ETH in this market dip?
The recovery of ETH ultimately hinges on regaining your support, investor confidence, support from regulators, and overall altcoin sentiment, all led by Bitcoin performance.
Glossary of Key Terms
Trendline: A line drawn across a price chart to show the direction of the market. A break of a multi-year trendline indicates a drastic change in ETH price action.
Bearish Breakdown: Price changes causing an asset to break below strong support levels and repeat a prolonged downtrend, such as ETH’s recent decline.
Support Level: A price level where buying interest is strong enough to halt a decline. The key support levels for ETH are $1,990 and $1,450.
Bitcoin Dominance (BTC.D): Bitcoin market cap dominance: The measure of Bitcoin’s market cap in relation to the total crypto market. BTC dominance rising typically spells bad news for things like ETH.
US Crypto Reserve: A government crypto fund proposed by Trump (no ETH in November) deviation SARS-2 after it was revealed ETH will be an eligible asset.
Market Volatility: The amount of price movement in financial markets. The price drop in ETH was due to increased volatility due to regulatory and technical factors.
Altcoin: Any cryptocurrency other than Bitcoin Being the largest altcoin, ETH often leads the overall market but is very much influenced by Bitcoin.
Liquidation: The automatic closing of leverage positions due to a lack of sufficient collateral. ETH’s sudden fall caused more than $530 million in liquidations, driving its price down further.
