Feb 3, 2025

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Ethereum Price Drops Over 15% Amid $2.2 Billion Crypto Liquidations

The total crypto market cap fell over 10% to approximately $3.2 trillion on February 3, 2025. Key developments include:

Ethereum price dropped more than 15%, retesting support around $2,117 before recovering to about $2,600.
Bitcoin slipped below $96K, nearing the support level of $91K.
Over $2.2 billion was liquidated in the leveraged crypto market, with Ethereum leading at around $609 million.
Other significant liquidations included Bitcoin ($410 million), Ripple's XRP ($117 million), Dogecoin ($87 million), and Solana ($85 million).

This liquidation event marked the largest since Bitcoin's inception, surpassing previous major selloffs.

Reasons for the Market Decline

Overheated leveraged markets following pro-crypto U.S. President Donald Trump's inauguration led to a cooling off.
Sell-the-news dynamics contributed to the current long-squeeze.
The market is influenced by global stock indexes signaling potential further declines.
Trade wars involving tariffs have increased mid-term market uncertainty.
Whale investors are showing low confidence, evidenced by rising Bitcoin and Ethereum supply on exchanges.

Future Outlook

Analysts foresee a continuation of macro bullish sentiment fueled by institutional interest.
Market recovery may follow the end of the Federal Reserve's Quantitative Tightening (QT).
A sustained Bitcoin price above $108K could initiate a new bull cycle; however, a drop below $90K may indicate ongoing bearish trends.