Ethereum (ETH) just dropped below the $2,000 mark for the first time since August, fully erasing the gains it saw as a result of the latest rally.
Trading volumes have nearly doubled to $16.6 billion and currently account for 7% of the asset’s circulating market cap.
Moreover, crypto long liquidations spiked to as much as $1.45 billion. Although nearly a third of this amount belongs to Bitcoin (BTC) positions, ETH longs also took a strong blow, with $260 million in positions being forced into liquidation in the last 24 hours.
Nearly $5 billion worth of long positions have been wiped out of the futures market in the last 10 days, as the downtrend that started in late September accelerated due to a series of negative catalysts on the political and macroeconomic front in the United States.
Meanwhile, sentiment in the crypto market has soured lately. According to the Crypto Fear and Greed Index, investors are in “Extreme Fear” mode following the latest decline. This is the first time this sentiment gauge has hit these levels since June this year.
Wall Street Withdraws $2.3 Billion From Ethereum ETFs in Less Than 45 Days
This week, a hotter-than-expected inflation report led to a revision of analysts’ projections for interest rates. According to data from FedWatch, the market now sees a 66% chance of a 50-basis-points rate hike during the January FOMC meeting.
An increasingly hawkish Federal Reserve is bad for risky assets like cryptocurrencies, which explains why the sell-off intensified.
Meanwhile, monthly net outflows to exchange-traded funds (ETFs) linked to ETH ended last month at $1.6 billion, as Wall Street is clearly running away from the sector entirely.
In November, net outflows are already totaling $700 million, translating into a monthly run rate of around $1.7 billion.
Unless the Glamsterdam upgrade, a technical overhaul that is expected to be rolled out during this last quarter of 2026, manages to turn sentiment around, we believe that ETH’s short-term and mid-term outlook is now bearish.
This thesis would be confirmed if the price action breaks below a key support at $1,940.
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See all Ethereum forecastsETH Could Revisit $1,500 If It Breaks This Support Level
Turning to the daily chart, we can see that ETH fully filled the huge fair value gap (FVG) left behind during the August rally, as the price broke past $2,000.
At some point, we saw the latest pullback as a replay of the pattern that unfolded in April – May 2025 during what was the beginning of a bull market for ETH that eventually pushed it to a new all-time high.
We are still not fully discarding the possibility of a recovery, as ETH has bounced off strongly after hitting the $1,930 area.
Nonetheless, if the price starts to rise, that would still qualify as a technical bounce, as the Relative Strength Index (RSI) is already neck-deep into oversold territory.
If that rebound occurs, the nearest target for ETH would be $2,400 or the 200-day exponential moving average (EMA) on the daily chart, which currently sits at $2,300.
Otherwise, if the price breaks below $1,930, it is highly likely that the top altcoin will revisit its 6 June lows at around $1,500.