Amid War Fears and High Rates, Ethereum Flashes Warning of Further Decline

▲ Ethereum (ETH)

Ethereum (ETH) has repeatedly failed to secure a position above the psychological resistance level of $2,000, extending its losses since the beginning of the year, while market experts have highlighted five decisive factors behind the recent price decline.

According to cryptocurrency outlet CoinGape on Feb. 19 (local time), Ethereum is currently facing strong selling pressure amid a combination of negative factors, including Bitcoin’s weakness and geopolitical crises. In particular, escalating tensions between the United States and Iran have strengthened demand for safe-haven assets, dampening liquidity across the broader digital asset market. As officials in President Donald Trump’s administration have hinted at the possibility of an attack on Iran, significant capital has flowed out of risk assets such as cryptocurrencies.

Deteriorating technical indicators have also been a major cause of the price drop. After falling below the 200-week moving average of $2,450 in early February, Ethereum has failed to reclaim the level, entering a technical bear market. Blocked by the strong resistance at $2,000, large-scale long position liquidations occurred, driving prices further downward. Analyst Ted Pillows warned that if the current geopolitical situation worsens, Ethereum could decline further to between $1,850 and $1,900.

Continued selling by whales and major institutions has also weighed on the market. Amid bearish outlooks from industry heavyweights such as Arthur Hayes and Peter Schiff, news emerged that billionaire Peter Thiel had sold his entire stake in Ethereum treasury-focused firm Etherialize. Additionally, Garrett Jin, known as an insider trader, deposited approximately 261,000 ETH worth about $542.57 million to Binance, engaging in large-scale profit-taking and exacerbating the supply-demand imbalance.

Outflows from spot Ethereum ETFs also reflect negative institutional sentiment. Last Wednesday, spot Ethereum ETFs recorded total net outflows of $41.83 million, with $29.93 million withdrawn from BlackRock’s ETHA alone. According to data from Santiment, retail investor interest has cooled sharply, and sentiment indicators have entered deeply pessimistic territory, with on-chain signals pointing to the possibility of further declines.

Finally, the release of the January Federal Open Market Committee (FOMC) minutes, which reflected the Federal Reserve’s hawkish stance, dealt a final blow to prices. Amid concerns that the pace of inflation slowdown could be slower than expected, Fed officials left open the possibility of additional rate hikes, dampening market expectations for rate cuts. With declining open interest and Binance’s leverage ratio falling to its lowest level since last December, the market is expected to maintain a cautious, wait-and-see approach for the time being.

*Disclaimer: This article is for investment reference purposes only, and no responsibility is taken for any investment losses resulting from it. The content should be interpreted solely for informational purposes.*