Ethereum Drops Below $2,000—Market Faces Unprecedented Selloff!
The digital currency market is in turmoil, and Ethereum (ETH) is taking the hardest hit. For the first time in 2025, ETH price has plunged below $2,000, marking a critical bearish milestone. While Bitcoin (BTC) and other altcoins are also experiencing turbulence, Ethereum’s selloff has been particularly aggressive. Since December 14, ETH has lost nearly 50% of its value, contributing to a staggering $1.2 trillion wipeout across the crypto space.
Several factors are fueling this downward spiral, with economic uncertainty surrounding Donald Trump’s policies playing a central role.
Bitcoin and Ethereum Price Outlook
At the time of writing, Bitcoin is trading at $78,220, reflecting a 5.92% drop in 24 hours, while Ethereum sits at $1,901.36 after shedding 5.45% of its value.
Other major altcoins, including XRP, Solana (SOL), and Cardano (ADA), are also seeing sharp declines. Cardano suffered the biggest loss at 6.18%, while Solana saw $34 million in liquidations—the highest among altcoins.
Adding to the concern, the much-anticipated Ethereum ETF product has failed to stabilize ETH’s price, as the coin has dropped more than 14% in the past two weeks.
The intense selloff has triggered a staggering $828 million in liquidations, affecting over 268,000 traders in the past 24 hours alone.
Here’s a breakdown of Ethereum’s liquidation figures in the last 24 hours:
- Total ETH liquidations: $197.18 million
- Long positions wiped out: $157 million
- Short traders losses: $39.82 million
Why Is the Crypto Market Crashing?
According to The Kobeissi Letter, the crypto and S&P 500 markets have lost a combined $5.5 trillion in just two months. Analysts point to the February 1, 2025, trade war as a key catalyst, which has rattled investor confidence.
Although fears of a trade war were building as early as mid-2024, markets initially surged on optimism. However, recent tariff hikes and shifting risk sentiment have sent both traditional markets and crypto into a nosedive.
A crucial metric of investor confidence, the Magnificent 7’s capital dominance, has dropped dramatically, signaling a shift toward risk-off strategies. This trend has spilled over into crypto, where institutional short positions on Ethereum reached historic highs by February 9.
Ironically, the downturn coincides with optimism over a potential U.S. crypto strategic reserve, which was initially expected to fuel a bullish rally. However, disappointment over the reserve’s rollout led to investors exiting key market positions at an alarming rate.
Currently, the sentiment across the crypto market is deeply cautious, as outflows exceed $3.5 billion in just the past week. However, with bears exhausting their positions, a potential reversal could be on the horizon.
Crypto Market’s Strategic Play for 2025
Despite the current turmoil, analysts see a shift in market positioning ahead. According to The Kobeissi Letter, investors who anticipate the next wave of momentum will be the biggest winners this year.
Here are the key indicators signaling a potential market turnaround:
✅ The Volatility Index (VIX) has surged 70% in the past 30 days
✅ Dow Jones is expected to rally at least 1,000 points in the coming weeks
✅ Correlation between equities and crypto suggests BTC and ETH could follow with a strong rebound
As market sentiment recalibrates, bullish trends may re-emerge, bringing fresh opportunities for investors prepared for the next big swing. Whether Bitcoin and Ethereum regain strength depends on upcoming economic shifts, but one thing is clear—2025 is shaping up to be a year of extreme volatility and high-stakes trading.
