- Ethereum has fallen below $1,500 for the first time since March 2023, driven by macroeconomic tensions and significant liquidations.
- Despite upgrades like the Pectra update, increased competition from layer-2 solutions and a declining burn rate are putting additional pressure on ETH’s price.
Ethereum has fallen below $1,500 for the first time since March 2023, driven by macroeconomic tensions and significant liquidations. Despite upgrades like the Pectra update, increased competition from layer-2 solutions and a declining burn rate are putting additional pressure on ETH’s price.
Ethereum (ETH) has hit a troubling milestone, falling below $1,500 for the first time since March 2023. The cryptocurrency’s sharp 20% drop in just 24 hours has sent shockwaves through the market, as Ethereum now trades at $1,476—well below its recent high of $1,799. This price slide follows broader market trends, with significant selloffs driven by mounting macroeconomic pressures.
The Macro Impact: Donald Trump’s Tariffs Weigh on the Market
One key factor behind Ethereum’s sharp decline appears to be economic tensions linked to new tariffs introduced by former President Donald Trump. These tariffs have added strain to the broader crypto market, contributing to widespread losses. Ethereum, being one of the largest cryptocurrencies by market cap, has felt the brunt of this market-wide selloff.
Ethereum Liquidations Surge
The past 24 hours have been particularly brutal for Ethereum traders. Over $400 million worth of ETH positions have been liquidated, with long trades accounting for around $341 million of that total. As traders scrambled to cut their losses, Ethereum futures saw a 15% drop in open interest, signaling a retreat from the market.
One particularly heavy loss came from a major Ethereum whale. A significant loan taken out on the decentralized finance platform Sky (formerly Maker) led to the liquidation of 67,570 ETH, worth over $100 million, as the system sold off the collateral when the price fell below a critical threshold.
Ethereum’s Struggles Extend Beyond This Selloff
While this recent dip is alarming, Ethereum’s troubles are part of a broader trend. The cryptocurrency closed Q1 2025 with a 45% loss, marking its third-worst quarter since 2016. Ethereum’s network fee income has also taken a substantial hit, dropping from $142 million in January to just $21 million in March 2024. Despite leading the decentralized exchange (DEX) trading volume in March, Ethereum’s fundamentals remain under pressure.
The Road Ahead: Increased Competition and Inflationary Pressures
Ethereum’s path forward looks uncertain. Analysts have become more cautious following an optimistic 2024 outlook. Standard Chartered recently lowered its year-end price target for Ethereum from $10,000 to $4,000, citing increased competition from layer-2 solutions like rollups, which offer faster speeds and lower fees. Additionally, Ethereum has once again become inflationary, with its burn rate—an important deflationary indicator—plummeting to its lowest point since August 2021.
While the upcoming Pectra upgrade could provide some relief, Ethereum’s continued struggles amidst macroeconomic pressures suggest that the road ahead will remain challenging.
