Ethereum (ETH) Drops 13.8% to $2,000 Support Level

Over the last week, Ethereum (ETH) has dropped 13.8%, currently trading at the critical $2,000 support level. While the digital asset’s weekly Relative Strength Index (RSI) has hit its lowest point in three years, analysts warn that further downside may still be ahead.

The cryptocurrency market is currently facing pressure from various factors, including US President Donald Trump’s trade tariffs on Canada and Mexico, which took effect earlier today.

According to the latest data from Kalshi, there is a 39% probability of a recession occurring in 2025.

The broader crypto market has also seen some weakness, with the total market cap declining from $3.7 trillion on December 14 to $2.8 trillion at the time of writing. Major cryptocurrencies such as Bitcoin (BTC) and ETH have been hit hard, dropping 7.1% and 8.9% in the past 24 hours, respectively.

Unlike BTC, which had an amazing 2024 with multiple new all-time highs (ATH), ETH has struggled since reaching its peak of $4,878 in November 2021. In the past year, ETH is down 41.6%, while BTC has risen by 26%.

The latest crypto market pullback has added to ETH’s challenges, bringing it down to the psychologically significant $2,000 level. As crypto analyst Jesse Olson noted, the intense selling pressure has pushed ETH’s weekly Relative Strength Index (RSI) to 35.87, its lowest reading since May 2022.

“The lower low in May 2022 wasn’t the bottom either, as BTC went on to drop another 60% from there. If ETH follows a similar trajectory, we can expect to see another 60% drop from $2,000, which would take us to around $800.”

However, fellow crypto analyst Merlijn The Trader warns that it’s not quite time to panic yet. According to him, ETH is approaching a crucial “make or break” level on the RSI.

If it breaks below this level, which is lower than the March 2020 lows, then we can expect "serious" further downside in the coming months, potentially to new all-time lows. But if it manages to hold above this level and begins to rise again, then we might finally see the beginning of a new bull market.

Despite the macroeconomic uncertainty due to Trump’s trade tariffs, some analysts remain optimistic that ETH is nearing its bottom and could soon resume its uptrend.

In an X post, one crypto analyst noted that Ethereum is currently retesting the 21-Day EMA on the 3-Month chart, an event that has never seen an instance of a candle closing below this level.

According to the analyst, either history will repeat itself or the cryptocurrency is getting very close to hitting its bottom. The analyst concludes by advising traders to be “VERY CAREFUL” with any panic selling.

There might still be hope for the second-largest cryptocurrency, as recent analysis found that ETH exchange balances have dropped to a 9-year low, strengthening the digital asset’s supply scarcity narrative.

At press time, ETH trades at $2,126, down 8.9% in the past 24 hours.