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The cryptocurrency market, led by Ethereum (ETH) and Bitcoin (BTC), shed more than $500 billion in net valuation since Friday to hover about $3.16 trillion on Monday, February 3, during the early Asian session. Following the heavy deleveraging in the crypto market, more than $2.1 billion was liquidated in the past 24 hours, higher than the FTX and COVID-19-induced crypto crashes.
Bitcoin price has dropped more than 10 percent in the past two weeks to retest a crucial support level above $91k. Ethereum price shed more than 30 percent in the past two weeks to retest the multi-month support level of around $2,136.
Top Reasons Why Crypto Market Crashed Today
The cryptocurrency market has been reacting to the onset of Donald Trump’s second term in the past few weeks. After receiving significant hype in the months leading to Trump’s second inauguration in mid-January, the crypto market has experienced a sell-the-event scenario in the past two weeks.
Notably, US President Donald Trump launched trade wars with Canada, Mexico, and China, thus triggering retaliation from the affected nations. As a result, the crypto market followed major stock indexes led by the Dow Futures.
Ethereum Whales Capitulate
The notable capitulation in Ethereum price was heavily fueled by whales’ panic selling. As Ethereum’s supply on centralized exchanges surged to a new 12-month peak of nearly 16.2 million, on-chain data shows several whales deposited their Ether to different CEXes for sale in the past 24 hours.
What Next for Ether?
From a technical analysis standpoint, Ethereum price has retested a crucial support zone, which must hold in the coming weeks to re-ignite the next phase of the macro bull run. According to crypto analyst Ali Martinez, if Ether’s price holds the support level above $2,750, the stage will be set for the next rally beyond $6k.
According to crypto analyst Benjamin Cowen, Ethereum price, against Bitcoin and potentially the US dollar, will bottom out after the Fed’s Quantitative Tightening (QT) ends.