Ethereum Crashes Below $2,400 Amid Crypto Market Sell-Off

The sharp decline in Ethereum’s price represents a rapid reversal from its position earlier in the week. On Wednesday, ETH had reclaimed the psychologically significant $3,000 level, briefly tapping $3,070. This rally, however, was immediately ahead of the first Federal Open Market Committee (FOMC) meeting of the year. The subsequent decision by the Federal Reserve to pause interest rate cuts acted as the initial catalyst for a market-wide downturn, with Ethereum beginning a “spectacular nosedive” in the hours following the announcement.

The bearish momentum accelerated on Thursday as skyrocketing geopolitical tensions in the Middle East injected fresh fear into risk-on asset markets. This dual macro shock—monetary policy uncertainty combined with heightened geopolitical risk—proved devastating. Ethereum, alongside the broader crypto market, tumbled below $2,800, setting the stage for the weekend’s crash below the $2,400 support level for the first time since July 2.

From a technical perspective, the breakdown was severe. Analyst Merlijn The Trader highlighted that Ethereum dropped below a crucial support level at $2,700, placing the asset in what he described as a “make-it-or-break-it” situation. This breach of a key technical floor signaled to traders that further downside was likely, contributing to the selling pressure.

On-chain data provided further evidence of investor distress. According to analyst Ali Martinez, Ethereum investors have been moving tokens to trading platforms “en masse,” with more than 70,000 ETH deposited onto exchanges in just the past three days. Such a movement typically signals an intent to sell, increasing the available supply on the market and exacerbating the price decline. The crash has been particularly punishing for over-leveraged traders. Data from CoinGlass reveals that over $550 million worth of ETH long positions were liquidated in the past 24 hours, a figure that even exceeded the $475 million in Bitcoin (BTC) liquidations during the same period.

Despite the overwhelming negative sentiment and retail investor exodus, a counter-narrative emerged from large-scale traders. Analyst CW pointed to significant whale activity, claiming that Ethereum whales have been net buyers of the asset at a much higher rate than for Bitcoin over the past day. According to CW’s analysis, these large players are profiting from short positions while simultaneously building long positions at lower prices.

The scale of this activity is substantial. CW’s data indicates that over a 10-hour period, whales executed net buying of $2.97 billion on the Binance Futures market and $2.42 billion on the OKX Futures market. This suggests that sophisticated market participants view the current price dislocation as a potential accumulation opportunity, even as retail investors face steep losses. This divergence in behavior between retail and institutional-scale traders highlights the complex dynamics at play during a market crash.

Ethereum’s crash to a seven-month low underscores the cryptocurrency market’s acute sensitivity to traditional macroeconomic and geopolitical forces. The combination of a hawkish Fed pause and Middle East tensions provided the trigger, while technical breakdowns and mass exchange deposits fueled the fire. As the market digests these events, all eyes will be on whether Ethereum can stabilize above its new lows or if the whale accumulation signals a forthcoming bottom.