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Ether (ETH) price declined by over 11.75% in the last 24 hours to around $1,900. At its intraday low, the cryptocurrency was trading for $1,755, its lowest price since October 2023.

ETH/USD four-hour price chart. Source: TradingView

Several factors appear to be contributing to ETH price losses, including:

• US recession fears and its overall impact on risk-on markets.

• Massive long liquidations in the crypto market.

• Crypto loans backed by ETH as collateral facing liquidation risks.

• Bearish technicals.

Ether price declines with risk-on assets

Ether’s ongoing price drop mirrors similar declines in the broader risk-on market due to unfavorable macroeconomic conditions.

Key points:

• The crypto market’s combined market capitalization has dropped by over 4.6% in the last 24 hours, aligning with selloffs in US stocks.

TOTAL crypto market cap vs. Nasdaq, Dow Jones, S&P 500, and US 10-year Treasury note yields four-hour chart. Source: TradingView

• JPMorgan raised US recession risk to 40% for 2025, up from 30%, citing US President Donald Trump’s "extreme US policies" as a key risk factor.

• Goldman Sachs also raised its 12-month recession probability to 20%, up from 15%.

• Earlier in March, Trump imposed 25% tariffs on all goods from Mexico and Canada, and 10% tariffs on Chinese imports.

• Canada and Mexico have announced intentions to impose retaliatory tariffs on US goods, escalating trade tensions and raising concerns about a potential trade war.

• Meanwhile, China has already retaliated by increasing tariffs on multiple US products and imposing export controls and investment restrictions on 25 US firms.

• These tariffs are expected to increase consumer prices and contribute to US inflation.

US recession fears are impacting Ethereum and the crypto sector, notably:

• Ether, Bitcoin, and other top-ranking crypto assets have historically declined during periods of economic turbulences, e.g., the Covid-19 sell-off in March 2020.

• As of March 11, the 52-week correlation between the crypto market and the US benchmark index, the S&P 500 index, was 0.69.

TOTAL crypto market cap and S&P 500’s 52-week correlation coefficient. Source: TradingView

• A consistently positive correlation increases the odds of a crypto market decline if US stocks keep falling, especially as the trade war drags on further.

• Bond traders see no need for a rate cut before June, with CME data showing 95% and 52.5% odds of a pause in the Fed’s March and May meetings, respectively.

Target rate probabilities for March’s Fed meeting. Source: CME

• The rate cut pause scenario dampens the crypto and ETH risk appetite.

Bad DeFi loans increase Ether sell-off pressure

A $74 million DeFi loan on the Sky protocol, collateralized with $130 million in ETH, almost got liquidated after Ether price fell below the liquidation level just above $1,900.

As it happened:

• The borrower added $34 million in ETH as collateral to avoid liquidation.

• Withdrew $1.6 million in USDT from Binance, swapped it for DAI, and deposited into Maker.

• Reduced debt to $73.1 million while ETH’s price continued to decline.

• Liquidation level remained at $1,836 per ETH, closer to ETH’s current price above $1,900.

• Nearly $353 million in debt is tied to such loans, risking liquidation if ETH’s price falls 20% from here.

Ethereum liquidation levels in DeFi. Source: DefiLlama

• Such a cascade of liquidations could exacerbate the downward pressure as borrowers scramble to stabilize their positions by selling or moving ETH.

Long liquidations accelerate ETH downtrend

Ether’s tumble over the past 24 hours coincided with a wave of long liquidations that forced traders to exit their leveraged positions.

Key takeaways:

• Over $240 million worth of ETH positions were wiped out in the last 24 hours, with long liquidations accounting for $196.27 million, or 82% of the total.

ETH total liquidation chart. Source: Coinglass

• The sharp price drop triggered a cascade of forced sell-offs as traders betting on Ethereum’s price increase were liquidated.

• When leveraged long positions fail to maintain margin requirements, exchanges automatically sell off their holdings to cover losses.

• Such liquidations accelerate price declines, exacerbating the downturn.

• The broader crypto market also experienced a sharp deleveraging event, with total liquidations reaching $897.26 million across assets.

Crypto market liquidations (24 hours). Source: TradingView

Ether eyes further decline toward $1,700

From a technical perspective, Ether’s price decline today is part of its prevailing inverse-cup-and-handle (IC&H) pattern.

Key points:

• The rounded top formation (cup) suggests a loss of bullish momentum, with sellers gradually taking control.

ETH/USD daily price chart. Source: TradingView

• A temporary consolidation (handle) formed near $2,700, indicating a failed breakout attempt.

• ETH broke below key support levels, confirming the IC&H breakdown, leading to more losses.

• The measured move target from the pattern suggests a potential decline toward $1,700, aligning with the dotted support level.

• The 50-day EMA ($2,600) and 200-day EMA ($2,929) remain far above, reinforcing bearish sentiment.

Key levels to watch:

• ETH price is inside a descending channel pattern since late February.

• As of March 11, the ETH/USD pair was rising after testing the channel’s lower trendline as support.

ETH/USD four-hour price chart. Source: TradingView

• Such rebounds have taken prices toward the channel’s upper trendline in recent history.

• If the fractal repeats, ETH’s next upside target could be around $2,000, aligning with the 0.236 Fibonacci retracement line.

• A reversal from current price levels could have ETH test the IC&H downside target of $1,700.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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