Ethereum has fallen 55% from its December high, reflecting the broader weaknesses that have hit the crypto market amid escalating global uncertainty. Much of the recent pressure came from US President Donald Trump’s aggressive tariff policy and unpredictable economic stance, rattling investors’ trust and fostering risk-off sentiment across financial markets. Highly volatile assets like Ethereum have been hit particularly hard, with the Bulls struggling to hold key support levels and sellers continue to dominate short-term price action.
Despite the bearish outlook, on-chain data offers a faint hope for Ethereum’s long-term outlook. According to Cryptoquant, Ethereum Exchange reserves have been steadily declining since 2022. This is a trend that suggests a continuous decline in available supply on centralized platforms. This has not yet been converted into an upward price action, but it shows a narrowing of potential supply once demand returns.
For now, ETH remains under pressure without any immediate signs of a reversal, but a shrinking exchange supply could set the stage for a strong gathering when buying interest. Until then, Ethereum has been trading in a vulnerable state, with investors closely watching signs of support and further breakdowns in the coming weeks.
Ethereum tests critical support when replacement supply drops
Ethereum is testing key demand levels as the market continues to bearish. After weeks of sustained sales pressure, ETH is currently below the $1,800 level. This is the zone that many analysts consider as the last line of defense before deeper losses. The broader macroeconomic background remains challenging, tightening the fears and financial position of a trade war, putting risky assets under pressure.
Ethereum has been particularly weak since the Bulls lost control after falling below $2,500 since late February. Since then, price action has steadily declined, and hopes for a bullish cycle has faded. Investor sentiment is vulnerable, and the bull is not showing enough strength to regain broken support levels or initiate meaningful recovery.
However, there are signs of long-term potential building beneath the surface. ETH supply of ETH has plummeted, according to top analyst Quinten Francois. Encrypted data shared via X shows a significant downtrend in Ethereum held on a centralized platform. This indicates that investors may be moving assets into cold storage, reducing sell-side pressure.
This continuous decline in exchange supply has preceded a historically bullish breakout. Once demand returns and prices are integrated, the thin supply of exchanges could serve as fuel for sharp gatherings. Although current conditions remain bearish, the structural reductions in available ETH provide an attractive setup for future rebounds.
For now, Ethereum needs to hold above the $1,750-$1,800 range to prevent deeper slides, but the moment the supply drops meets new purchasing pressure, long-term holders are looking closely.
ETH is below important weekly metrics
Ethereum is currently below the weekly 200-day moving average (MA) of around $2,500 and nearly $2,250. This is an important long-term indicator that currently serves as an overhead resistance. This breakdown highlights the severity of the ongoing corrections, and the Bulls are under great pressure to prevent further losses. ETH now flirts at the end of the lowest week since October 2023, adding to concerns that the cave could deepen if buyers were unable to intervene immediately.
Momentum has remained weak, and bullish attempts to recover have been short-lived due to macroeconomic instability and continued sales pressure due to weight in the broader crypto market. To avoid further downsides, Ethereum needs to hold the $1,800 level. This is the main demand zone and psychological threshold.
If the Bulls can keep this level and regain the $2,000 mark in the coming days, it could mark the beginning of a recovery rally. Re-entering this range will change your emotions and will likely trigger interest on new purchases. Until then, ETH remains vulnerable, and if below $1,800, it can open the door to a lower level of support retest, potentially driving a decline if emotions get worse.
Dall-E special images, TradingView chart
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