Date: February 3, 2025 | 03:42 AM GMT
The cryptocurrency market has experienced a brutal crash over the past 24 hours, shaking investor confidence. Bitcoin (BTC) dropped over 5%, hitting a low of $91K before recovering slightly to $93K. Ethereum (ETH) took an even harder hit, plunging 19% to reach $2,159 before rebounding to over $2,400. The primary reason behind this steep decline appears to be concerns over potential tariff wars initiated by U.S. President Donald Trump, which have triggered uncertainty across global markets.
As a result, major altcoins have also suffered significant losses. XRP (XRP), Stellar (XLM), and Hedera (HBAR) all saw declines of over 20%, adding to the widespread market panic.
Source: Coinmarketcap
Historic Liquidations Shake the Market
This crash is shaping up to be one of the worst in recent history, surpassing both the COVID-19 market collapse and the FTX downfall. A staggering $2.19 billion has been wiped out from derivatives markets in the past 24 hours alone, exposing the vulnerability of overleveraged positions.
Source: Coinglass
The sheer scale of liquidations highlights how traders were caught off guard, amplifying the downward momentum.
Ethereum (ETH) Holds Critical Support
Ethereum’s weekly chart reveals that it has been consolidating within a symmetrical triangle pattern since the 2021 bull run. The recent rejection from the upper descending trendline at $4,100 on December 2nd has sent ETH spiraling downward, forcing it to test its lower ascending trendline support at $2,152.
Ethereum (ETH) Weekly Chart/Coinsprobe (Source: Tradingview)
Currently, ETH is holding this crucial support and trading at $2,484. The 200 Simple Moving Average (SMA) could provide as an additional safety net. As long as ETH maintains this support level, there is a strong chance of a rebound towards the upper descending trendline. Such a recovery could inject much-needed bullish sentiment into the broader altcoin market.
Final Thoughts
With Ethereum maintaining its key support, a market-wide recovery remains a strong possibility. However, the intensity of this sell-off suggests possible manipulation, making the situation highly unpredictable. If ETH holds steady, it could lead a rebound for altcoins, but a breakdown below support could open doors for further declines. Traders should remain cautious in these volatile conditions.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.
