The second most valuable cryptocurrency by market value, Ethereum, has just seen a significant fall. Ether’s price abruptly plunged to its lowest position since January 2024, falling below $2,080 before somewhat increasing. Why prices have decreased suddenly and what this could entail for investors perplex them. Let’s consider the causes behind Ethereum’s declining price today.
1. Flash Crash and Bearish Volatility
On February 3, Ether’s price quickly fell to $2,080, a low that hasn’t been reached since early 2024. This sharp drop is due to the negative feelings about the market that grew over the weekend. A missed rise in prices on January 31 caused a big drop, resulting in a 40% fall from the high on January 31 to the low on February 3. This quick drop shocked buyers and led to many sales in the crypto market.
2. Effects of Global Events
The crypto market wasn’t the only one to go down. Global events hurt Ethereum and other digital assets. Markets worldwide fell due to President Trump’s trade policy, particularly the tariffs in China, Canada, and Mexico. Investors became cautious, resulting in many selling off their assets. As countries responded to each other, the market became more unsure, causing Ethereum’s price to fall even more.
3. Ethereum Open Interest (OI) Decreases Sharply
Ethereum’s open interest (OI), which shows the total value of active futures contracts, dropped by 28% in only three days. The decrease from $31.2 billion to $22.6 billion shows that futures players were sold off quickly. The big drop in open interest shows that many traders were surprised by the market crash and are now cautious about returning until things become clearer.
4. Market Feelings and Recovery Expectations
Even though Ethereum has gone up nearly 30% from its low point, people are still feeling careful about it. ETH fans are still dealing with the effects of the crash, and many are choosing to hold off and see what happens next. Losing the 200-day moving average increases concerns about further decline.
Conclusion
Ethereum fell today because of market volatility, global issues, and significant selloffs. Ethereum’s future is uncertain as the crypto market recovers.
