Ether rebounds from key support as macro pressure and liquidations fade

Ethereum bounces off key support

Ethereum (Ether) has come under renewed pressure since the beginning of the year, with a sharp sell-off recently marking one of its most pronounced pullbacks and highlighting how exposed the second-largest cryptocurrency remains to macroeconomic shifts, leverage dynamics and changing investor sentiment.

​At the start of the year, Ether had been trading in a relatively constructive environment. After a difficult end to 2025, prices stabilised and moved higher through early January as broader crypto markets found their footing. Confidence was supported by optimism around Ether’s long-term fundamentals, including ongoing protocol upgrades, growing layer-2 adoption and Ether’s central role in decentralised finance and tokenisation. This recovery phase suggested that much of the excess leverage and forced selling from late last year had been absorbed.

​That stability, however, proved fragile. The recent sell-off was triggered by a renewed risk-off move across cryptocurrencies. Rising government bond yields, uncertainty around the timing and scale of future interest-rate cuts and heightened geopolitical tensions prompted investors to reduce exposure to higher-risk assets. Cryptocurrencies once again moved in tandem with broader macro pressures, and Ether, which typically behaves as a higher-beta asset than Bitcoin, came under disproportionate pressure.

​Positioning amplified the decline. In the weeks leading up to the sell-off, derivatives data indicated that speculative long exposure in ETH had rebuilt as traders positioned for a continuation of January’s recovery.

​When prices failed to extend higher and instead slipped back below key short-term technical levels, stop-loss orders were triggered and liquidations accelerated. The forced unwinding of leveraged positions intensified the move, pushing Ether lower than spot-market selling alone would likely have caused.

​Institutional behaviour also played a role. Since the beginning of the year, flows into Ether-linked exchange-traded products have been mixed. Inflows into some newer spot-based vehicles have been offset by outflows from older trusts, reflecting a more cautious and tactical approach to allocation. During the sell-off, the lack of aggressive dip-buying from large institutions left prices exposed, allowing downside momentum to build more quickly.

​Ethereum-specific considerations added another layer to the pressure. While the network’s long-term outlook remains constructive, ongoing debate around layer-2 fee dynamics, competition from other smart-contract platforms and the pace at which protocol upgrades translate into economic value has kept Ether under closer scrutiny during periods of stress. These factors have not undermined confidence in Ethereum’s viability, but they have contributed to a more cautious tone when macro conditions deteriorate.

​Despite the severity of the recent decline, there are signs that the move has been driven more by sentiment and positioning than by a breakdown in fundamentals. On-chain data continue to point to relatively tight liquid supply, with a significant portion of ETH locked in staking and longer-term holdings. This appears to have limited panic selling and encouraged some longer-term investors to absorb supply at lower levels.

​Macro conditions remain central to Ether’s near-term outlook. As markets continue to reassess growth prospects and monetary policy, Ether is likely to remain sensitive to shifts in yields, liquidity and risk appetite. Any stabilisation in broader financial conditions could support further consolidation or recovery, while renewed macro stress would leave Ether vulnerable to additional volatility.

​Taken together, Ether’s recent sharp sell-off underscores a market still in transition. Short-term price action remains dominated by macro forces and leverage dynamics, but the absence of disorderly selling and the persistence of structural demand suggest that confidence in Ethereum’s longer-term narrative has not been materially damaged.

​Looking ahead, Ether’s direction will depend on whether broader market conditions stabilise and whether buyers can rebuild momentum without renewed liquidation pressure.

​For now, the episode serves as a reminder that even as Ethereum’s ecosystem matures, Ether remains a high-beta asset whose price can still move sharply when sentiment, liquidity and positioning shift.

​Ether bullish case:

​Ether's is seen bouncing off its major $2,166.03 - $2,141.30 support zone which encompasses the April 2023 high, December 2023, August - September 2024, February and June 2025 lows, and early-to-mid November 2023 and March 2025 highs.

​While it holds on a daily chart closing basis, a move back up towards the $2500 region may ensue.

​​Ether bearish case:

​Ether's sharp sell-off has temporarily halted at the $2166.03 - $2141.30 support zone but while no rise above Sunday's high at $2472.75 is seen, downside pressure is expected to dominate.

​A fall through the 10 April 2023 low at $2141.30 would likely engage the May to July 2023 highs at $2028.62-to-$2018.77.

​​Short-term outlook:

Bullish while above $2141.30.

​​Medium-term outlook:

Neutral with a bearish bias while below the 21 November low at $2622.43 but above the 10 April 2023 high at $2141.30.

Ether daily candlestick chart