Ethereum (ETH) Price Bloodbath: Crashes 11%, Can Bulls Defend $2300?

Ethereum (ETH) Price Bloodbath: Crashes 11%, Can Bulls Defend $2300?

TLDR

• Ethereum price has dropped approximately 40% from its previous high near $4,000, currently trading around $2,400
• Despite the selloff, the Ethereum Cost Basis Distribution shows investors are accumulating ETH at lower prices rather than exiting positions entirely
• Critical support level at $2,300 must hold to prevent further decline to $2,000
• Whale wallets holding 10K-100K ETH have increased by 24% over the past year
• Ethereum holds more than 50% of the stablecoin market cap, potentially benefiting from pro-crypto regulatory shifts

Ethereum, the second-largest cryptocurrency by market capitalization, is experiencing what may become its worst February performance in history.

The digital asset is currently trading at approximately $2,400, representing an 11% drop in the last 24 hours and a steep 40% decline from its previous swing high near $4,000.

The recent price action mirrors a massive pullback across the broader cryptocurrency market that saw the total market capitalization fall by about 8% to below $3 trillion.

According to data from Coinglass, total liquidations topped $1.5 billion, with Ethereum seeing the second-highest level at $300 million. Of these ETH liquidations, $276 million were from long positions, indicating that many traders betting on price increases were forced to close their positions.

ByBit Hack

The negative market sentiment has been compounded by the recent Bybit hack. Hackers are actively laundering stolen ETH on exchanges, and despite recovery attempts, this activity continues to weigh on Ethereum’s price and may cause further volatile price swings in the coming days.

However, amid this bearish pressure, data suggests that instead of panic selling, many investors are viewing this dip as a buying opportunity. Glassnode’s Cost Basis Distribution (CBD) metric, which tracks the price at which new investors are buying ETH, shows that the cost basis is dropping. This indicates investors are willing to purchase Ethereum at cheaper prices rather than exiting the market entirely.

One of the main accumulation zones identified shows traders bought 768,000 ETH as the price dropped to $2,632. Earlier this month, as ETH fell below $3,300, traders also purchased 1.22 million ETH at $3,149. If the downtrend continues, these patterns suggest it could mark the beginning of another accumulation phase.

Technical Analysis

From a technical analysis perspective, Ethereum is currently trading within a falling wedge pattern on its daily chart. This pattern often signals a potential reversal from a bearish trend. If ETH can bounce from the lower trendline and break through resistance at the upper trendline with strong buying volume, it could spark a rally past $3,200. However, failure to hold the lower trendline would likely lead to further downside.

The most critical support level to watch is $2,300, a price point that Ethereum has maintained since February last year. A breach below this level could accelerate a downtrend toward the psychological price of $2,000. However, the cost basis drop supports the thesis that the price might hold above $2,300 as buyers step in.

Another factor to consider is the potential for a short squeeze. Data shows that if Ethereum price can defend the $2,300 support and reverse to breach resistance at the upper trendline of its falling wedge, it could rally towards $3,000. Such a move could wipe out nearly $2 billion in short positions, potentially accelerating an uptrend due to additional buying pressure as short sellers close their positions.

Looking at momentum indicators, the 100-day and 200-day exponential moving averages (EMAs) are near a bearish crossover, while the Relative Strength Index (RSI) is approaching oversold levels. These technical signals often precede either a continued decline or a potential reversal if enough buying pressure emerges.

Despite the current market downturn, some analysts remain cautiously optimistic about Ethereum’s long-term prospects. Kate Young Ju, an altcoin data analyst, points out that whale accumulation continues even as prices fall. The cost basis for accumulating addresses has decreased to $2,199, while addresses holding 10,000 to 100,000 ETH have grown by 24% over the past year. This growth is mostly fueled by inflows from wallets holding less than 1,000 ETH, suggesting smaller investors are consolidating their holdings into larger positions.

Live Dashboard 👇https://t.co/A8XiFUZhpD

— Kate The Alt (@kate_young_ju) February 25, 2025

Ki Young Ju, founder and CEO of CryptoQuant, has highlighted additional factors that could support Ethereum’s recovery. Notably, no major selling pressure emerged after the recent Bybit hack, suggesting the market has largely absorbed the impact. Furthermore, Ethereum holds more than 50% of the stablecoin market cap, which could benefit from potential pro-crypto regulatory shifts under the current administration.

Some bullish thoughts on $ETH:

1/ No significant sell pressure post-Bybit hack. On-chain and market data remain neutral. Exchange selling takes time, and OTC offloads barely affect the price.

2/ Ethereum holds 56% of the stablecoin market cap. With Trump easing crypto regs,… https://t.co/y6EbavQzFf

— Ki Young Ju (@ki_young_ju) February 25, 2025

With more firms entering the cryptocurrency space, the demand for Ethereum-based stablecoins and smart contracts is likely to increase throughout 2025. The previous approval of spot ETFs has also provided regulatory clarity and optimism, which could fuel longer-term growth.

In the immediate term, however, market participants should closely monitor the $2,300 support level. If this price floor holds, Ethereum could potentially stage a recovery toward the $2,800 mark, which coincides with the upper trendline of the falling wedge pattern. Conversely, a breakdown below $2,300 could open the door to further declines toward $2,000.

As liquidations cool off after nearly $300 million in forced selling within 24 hours, the market may finally find room for stabilization. This cooling period could provide the foundation for a potential recovery if broader market conditions improve and accumulation continues at these lower price levels.

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