Ethereum has fallen 55% since its peak in December, mirroring the overall decline affecting the cryptocurrency sector amid rising global instability. A significant portion of the recent strain stems from US President Donald Trump’s assertive tariff strategies and erratic economic approach, which have shaken investor trust and fostered a risk-averse mood across financial markets. High-volatility assets like Ethereum have been especially affected, with buyers finding it challenging to maintain vital support levels while sellers persistently influence short-term price movements.
In spite of the pessimistic forecast, on-chain analytics yield a spark of optimism for Ethereum’s future. As reported by CryptoQuant, Ethereum exchange stockpiles have been gradually diminishing since 2022 — a trend indicating a continued decrease in available supply on centralized exchanges. Although this has not yet resulted in upward price movement, it hints at a possible supply shortage when demand resumes.
At present, ETH is still under strain with no immediate indicators of a rebound, yet the declining exchange supply could pave the way for a significant rally if purchasing enthusiasm increases. Until such a shift occurs, Ethereum remains in a delicate state, with investors observing closely for signs of support or further declines in the weeks ahead.
Ethereum Approaches Vital Support As Exchange Stockpiles Diminish
Ethereum is probing crucial demand levels as the market remains predominantly bearish. Following weeks of consistent selling pressure, ETH is presently trading beneath the $1,800 mark — an area many analysts consider a final defense line before a more substantial downturn. The overarching economic climate remains difficult, with fears of trade wars and tightening financial conditions keeping high-risk assets under pressure.
Ethereum has shown particular weakness since late February, when bulls lost command after the drop below $2,500. Since that time, price movement has persistently declined, and expectations for a bullish cycle have diminished. Investor sentiment is precarious, and bulls have yet to demonstrate sufficient strength to reclaim breached support levels or initiate a significant recovery.
Nonetheless, indicators of long-term promise are slowly forming beneath the surface. According to leading analyst Quinten Francois, ETH supply on exchanges is decreasing significantly. Shared via X, CryptoQuant data reveals a notable downward trend in Ethereum held on centralized exchanges — a sign that investors might be moving assets into cold storage, thus alleviating selling pressure.
This ongoing reduction in exchange supply historically precedes bullish breakouts. Once demand resurfaces and prices stabilize, the limited supply on exchanges might serve as a catalyst for a rapid rally. While current conditions are predominantly bearish, the structural decrease in accessible ETH presents a compelling outlook for a future recovery.
For the time being, Ethereum must sustain itself above the $1,750–$1,800 range to avert a more severe decline, but long-term holders remain vigilant for the moment when diminished supply intersects with renewed buying activity.
ETH Trades Under Essential Weekly Indicators
Ethereum is presently trading below both the weekly 200-day moving average (MA) around $2,500 and the exponential moving average (EMA) near $2,250 — critical long-term indicators that are now acting as overhead resistance. This breakdown underscores the seriousness of the ongoing correction, with bulls facing significant pressure to avert further losses. ETH is now on track for its lowest weekly close since October 2023, raising concerns that the downward trend could further deepen if buyers do not step in promptly.
Momentum remains feeble, and bullish attempts at recovery have been fleeting, as macroeconomic uncertainty and consistent selling pressure affect the broader cryptocurrency arena. For Ethereum to sidestep further decline, it must maintain the $1,800 mark — a vital demand area and psychological barrier.
If bulls manage to defend this level and regain the $2,000 threshold in the days to come, it could herald the start of a recovery rally. Reentering this range would alter sentiment and potentially trigger renewed purchasing interest. Until such developments occur, ETH remains susceptible, and a close below $1,800 could lead to a retest of lower support levels, possibly accelerating the decline if market sentiment deteriorates further.
Featured image from Dall-E, chart from TradingView
Editorial Process for bitcoinist is focused on providing meticulously researched, precise, and impartial content. We adhere to rigorous sourcing standards, and each article undergoes thorough review by our team of leading technology specialists and experienced editors. This procedure guarantees the integrity, relevance, and value of our content for our audience.
