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Author
Joel Frank
Author
Joel Frank
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Why Trust Cryptonews
The Ethereum (ETH) price has crashed back below $2,200 to levels that are actually below those before US President Donald Trump’s strategic crypto reserve announcement, which he said would include Ethereum.
The sudden reversal means that the Ethereum price is now down more than 13% so far for the session, a stunning reversal of fortunes that appears to have caught almost everyone off guard.
Macro fears were in focus on Monday, with analysts highlighting the risks to US economic growth from D.O.G.E austerity and Trump trade wars, as well as continued uncertainty about the Fed’s reaction function to an economic downturn.
The Atlanta Fed’s GDPNow index, a model that forecasts US economic growth based on recent US economic data releases, just plunged to -2.8% for Q1 2025.
Traders who FOMO’ed into the crypto market on Sunday appear to have been wiped out in substantial size.
Per coinglass, nearly $78 million in leveraged ETH futures long positions were “rest” in the past 12 hours.
FUD surrounding market manipulation and insider trading potentially also sapped confidence on Monday following Sunday’s euphoric but short-lived rally.
Most notably, shortly before the Trump crypto reserve announcement, a trader took out a $200 million 50x leverage long position on Bitcoin (BTC), netting $6.8 million in profits following the announcement.
Others on X noted that the coins Trump mentioned on Sunday, Bitcoin, Ethereum, Solana, XRP and Cardano, are the top five holdings of Bitwise’s 10 crypto index fund.
White House Crypto Czar David Sack’s Craftventures is a stakeholder in Bitwise.
So, is an economic crisis and insider scam season set to send ETH to fresh lows in 2025? And, worse yet, its the bull run since late 2022 finally over?
Where Next for the Ethereum Price?
Well, concerns about the economy are a major risk to the near-term outlook for major cryptos, and the Ethereum price could easily be setting up for fresh near-term lows.
How bad could things get? Well, in a worst case scenario where the US economy falls into recession but the Fed is slow to react, we could potentially be looking at a collapse back to the $1,500 area for the Ethereum price.
However, would this mean it’s “all over” for Ethereum?
Certainly not. A US economic crisis would almost certainty generate near-term downside volatility but would eventually precede some sort of major stimulus push from the Fed and/or US government.
And, as was the case in 2020/2021, this could end up being rocket fuel for the crypto market.
Add in all the bullish narratives surrounding accelerating nation-state and institutional adoption of major crypto assets, with a US strategic reserve potentially leading the way, and the foundations would be in place for a major rally.
Zero interest rates, QE, renewed fiscal stimulus, and massive US government and institutional buying could power the Ethereum price to unprecedented heights above $5,000 in the years ahead.
All investors need to do to benefit is 1) buy aggressively, especially during market dips and 2) hold through the volatility.
