In a dramatic event, ethereum price It fell below the psychological barrier of $3,000 and sank to a low of $2,800 before rebounding to current levels near $3,050. This sudden economic downturn has investors wondering what triggered such a significant collapse in the world's second-largest cryptocurrency.
Why did the price of Ethereum collapse?
1- Disruption of the entire market
The entire crypto market experienced a massive downturn, with Bitcoin briefly exceeding $60,000 and undermining all major altcoins, including Ethereum. Pervasive feelings of fear and uncertainty have led to a sell-off across the board.
2- Geopolitical tensions
Geopolitical tensions, such as Iran's recent attack on Israel, are exacerbating market volatility. During times of geopolitical instability, investors often seek safer havens and liquidate assets, including cryptocurrencies, leading to increased selling pressure.
3- Technical fixes
Cryptocurrency prices have soared to unprecedented heights in recent months due to speculative fever and institutional investor interest. However, such rapid price increases inevitably lead to overvaluation, prompting profit-taking and corrections in the market. The graph below shows how the crypto cap in $ units has been rising without major corrections until recently. A break in the triangle could trigger further declines.
4- Regulatory uncertainty
The cryptocurrency market has been disrupted by new regulatory scrutiny, with the SEC targeting high-profile players like Uniswap. Regulatory measures against cryptocurrency companies have fueled uncertainty and anxiety among investors, contributing to downward pressure on Ethereum's price.
Ethereum price prediction: Will Ethereum crash to $2,000?
Strong support at $3,000
The $3,000 level has historically served as strong support for Ethereum, cushioning the price during periods of market turmoil. However, if selling pressure continues, it could break this support level and trigger further downside momentum.
Potential price target
If Ethereum fails to sustain above $3,000, the next important support levels to watch are $2,600, $2,200, and $2,000. A breakout of these levels could signal a further correction and pave the way for a possible fall to $2,000, but this scenario remains speculative and subject to various market factors. Depends on it.
