Ethereum (ETH) has plunged below $2,200, wiping out gains made after former U.S. President Donald Trump’s strategic crypto reserve announcement. The dramatic reversal, marking a 13% drop within a single session, has left traders stunned and scrambling to reassess their positions.
JUST IN: Ethereum $ETH has lost ALL of its gains from yesterday's crypto reserve announcement 😂
— BlockNews (@blocknewsdotcom) March 3, 2025
Like it never happened pic.twitter.com/s1o3jMOLJi
Market Chaos: Macro Uncertainty and Liquidations
Monday’s downturn was driven by mounting macroeconomic fears. Analysts pointed to the risks posed by Trump’s proposed trade policies and fiscal austerity measures, coupled with concerns over how the Federal Reserve will respond to a possible economic downturn. The Atlanta Fed’s GDPNow index, a key growth forecast model, plunged to -2.8% for Q1 2025, signaling an economic slowdown that spooked investors.
Atlanta Fed's GDPNow index forecasts U.S. economy to plunge -2.8% in first quarter. pic.twitter.com/g34ecKNuZJ
— NewsWire (@NewsWire_US) March 3, 2025
As a result, traders who rushed into Ethereum over the weekend saw their positions liquidated at a massive scale. Data from Coinglass revealed that nearly $78 million in leveraged ETH futures longs were liquidated in the past 12 hours, further exacerbating the market decline.
Corruption, insider trading, rug pulls. I've been saying it. America is in its scam era.
— Fred Lambert (@FredericLambert) March 2, 2025
It's going to implode soon enough. https://t.co/li2sIXGU1G
FUD and Allegations of Market Manipulation
Adding to the turmoil, allegations of insider trading and market manipulation have rattled investor confidence. Shortly before Trump’s announcement, a trader reportedly placed a $200 million, 50x leveraged long position on Bitcoin, netting a staggering $6.8 million in profit. The timing of this move has raised eyebrows, fueling speculation about potential collusion.
Furthermore, some analysts have pointed out that Trump’s mentioned cryptocurrencies—Bitcoin, Ethereum, Solana, XRP, and Cardano—align closely with the top five holdings of Bitwise’s 10 Crypto Index Fund. White House Crypto Czar David Sacks’ involvement in Bitwise has only added to the skepticism.
What’s Next for Ethereum?
The near-term outlook for Ethereum remains uncertain. If the U.S. economy officially enters a recession and the Federal Reserve delays intervention, ETH could face a deeper correction, potentially dropping to $1,500.
However, history suggests that economic downturns often lead to aggressive monetary stimulus. Should the Fed reintroduce zero interest rates, quantitative easing, and fiscal stimulus, Ethereum and the broader crypto market could witness a massive resurgence—potentially pushing ETH past $5,000 in the long run.
Also Read: Ethereum Faces Record Q1 Crash: Will ETH Price Plunge Below $2,000?
For investors, the key strategy remains clear: buy during market dips and hold through the volatility.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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