Five Major Reasons for Ethereum $ETH 's Significant Drop and Lack of Rebound:
1. Market Sentiment Panic and Insufficient Liquidity The cryptocurrency market heavily relies on investor confidence. If Ethereum's price continues to fall, it may trigger panic selling, especially after the liquidation of leveraged traders, further exacerbating the decline. Just look at how many people were affected by the liquidation posts in $ETH ; when market liquidity seems to be drained, even selling at a loss finds no buyers. When buyers decrease and selling pressure increases, the momentum for rebound is naturally insufficient.
2. Macroeconomic Pressure March 2025 coincides with a period of potentially heightened global economic uncertainty. The Federal Reserve's interest rate decision (usually announced in mid-March) will directly influence the future direction of cryptocurrencies. If the market expects interest rate hikes or the continuation of tightening policies, more investors will withdraw from high-risk assets like cryptocurrencies, leading to further weakening of Ethereum's rebound. Additionally, if the US dollar index continues to strengthen, it will also suppress the inflow of funds into the cryptocurrency market.
3. Technical Support Broken From a technical analysis perspective, Ethereum has broken through a key support level (2000 USD), forming a bearish signal, which may indicate that the market is entering a downtrend. Bottom formation takes time, and without sufficient buying support, a rebound is difficult to achieve in the short term.
4. Weak Fundamentals The fundamentals of $ETH do not exhibit sufficient attractiveness. Although Ethereum has risen in the past due to favorable factors such as Layer 2 scaling and network upgrades (like Shapella), if there are no similar catalytic phenomena in 2025 (such as DeFi or NFT booms), investor confidence will further decline, leading funds to flow towards other competing chains or assets.
5. Short-term Oversold but Bottoming Not Completed Despite the significant drop, the market may still be in a "washing out" phase. Although it may currently be oversold, a rebound requires more time and accumulation of trading volume. If the bottom has not yet been solidified, the rebound momentum will appear weak.
The cycle of history is unfolding! The Great Depression of 1929 → the Smoot-Hawley Tariff Act of 1930 → global trade wars → the outbreak of World War II. And today, the United States is repeating the mistakes of the past! Tariffs are unlikely to make American manufacturing great again. 【Lessons from History】 In 1929, the Dow plunged by 40 percent, and the Hoover administration raised tariffs on more than 20,000 goods to 50 percent to protect domestic industries. 1,028 economists jointly opposed, and Ford and Morgan begged to no avail. Outcome: U.S. exports plummeted 85% (5.4 billion→780 million). Global trade shrank by 70% and the Great Depression intensified. Fascism rises and World War II breaks out.
《The New Threat from the Federal Reserve: Can Cryptocurrency Become the Ultimate Safe-Haven Asset Amidst the Clouds of Stagflation?》
As Wall Street raises glasses to celebrate the 'victory' of an economic soft landing, a more terrifying specter emerges from the Federal Reserve's crystal ball—stagflation. This demon that plunged the U.S. economy into the abyss in the 1970s is making a comeback with new minions.
1. Stagflation Alarm: Three Structural Crises
1. The Inflation Engine of Globalization Retreat: U.S. tariff policies and supply chain restructuring have shifted the pressure on commodity prices from 'temporary' to 'long-term.' Protectionist walls in key areas such as semiconductors and energy are reshaping the underlying logic of inflation.
2. The Death Cross of the Labor Market: The retirement of the baby boomer generation combined with immigration restrictions has caused the U.S. labor participation rate to drop to pre-pandemic levels. As companies are forced to compete for scarce labor with higher wages, the wage-inflation spiral may spiral out of control.
3. The Prisoner's Dilemma of Monetary Policy: Although inflation data has temporarily receded, core services inflation remains stubbornly high. Lowering interest rates could ignite new inflation, while maintaining high rates accelerates the debt crisis, putting the Federal Reserve on the edge of a cliff.
2. The 'Stagflation Script' of the Crypto Market
History does not simply repeat itself, but cryptocurrency may be writing a new paradigm:
- Bitcoin's 'Digital Gold' Status: During the stagflation period of the 1970s, gold prices surged by 2400%. Can BTC replicate this legend today? On-chain data shows that whale hoarding has reached historical highs.
- The Interest Rate Hedging Revolution in DeFi: Fixed-rate protocol Liquity and variable-rate platform Compound are building new financial infrastructure to combat interest rate fluctuations.
- NFT Opportunities in the Inflation Narrative: As traditional assets become mired, digital collectibles as 'vehicles for anti-inflation narratives' may see a revaluation of their worth.
3. Survival Guide Amidst a 50% Recession Probability
In the face of this economic storm, crypto investors need to:
1. Allocate 5-10% of $BTC as 'digital insurance'
2. Pay attention to the decentralized reserve mechanisms of stablecoin protocols
3. Be wary of leverage risks and prepare for potential liquidity shocks
As the Federal Reserve's policy shifts begin to affect global liquidity, cryptocurrencies may face the test of 'phoenix rebirth.' The stagflation of the 1970s gave birth to the modern venture capital system, will the stagflation crisis of 2026 usher in a golden age for decentralized finance?
🚨【Is the March Fed rate cut hopeless? My exclusive prediction may help you catch the next bull market!】🚨
🔥 Breaking heavyweight analysis: ✅ The probability of a Fed rate cut on March 20 is only 2%-3%! ✅ The pace of balance sheet reduction may slow down, but the rate hike cycle is far from over. ✅ Bitcoin may be temporarily dragged down by US stocks, but the rate cut window in May will ignite an epic market!
💡 Key insights: ▫️ Sticky inflation + tariff shocks = The Fed dares not ease monetary policy easily. ▫️ The correlation between Bitcoin and the S&P 500 has dropped to 0.55 (historical low). ▫️ On-chain data: Whale wallets are at a 6-month high, institutional holding cost is $82,000.
🚀 My prediction: "If you don't invest in Bitcoin now, you may miss a 200% surge after the rate cut in May!"
👉 Click to follow, to get:
1. Real-time interpretations of Fed policy shifts.
2. Key support/resistance alerts for Bitcoin at $BTC .
📉【Federal Reserve Interest Rate Cut Expectations Cool, How Will Bitcoin Perform in the Short Term?】
According to the latest analysis, the probability of a Federal Reserve interest rate cut on March 20 is approximately 2%-3%, with the probability of maintaining rates unchanged exceeding 97%! Core reasons:
2. Tariff Policies Driving Up Prices, Increasing Policy Uncertainty
3. Standard Chartered/Huatai and other institutions predict: Possible shift to easing after May
💡 Impact on Bitcoin $BTC : ✅ Short Term: If dovish signals are released, it may stimulate a rebound; but if balance sheet reduction accelerates, caution against a pullback is needed ✅ Long Term: Start of a rate cut cycle = Liquidity Feast, may push BTC to break 200,000 (Standard Chartered prediction) ❌ Risk Points: Hard Landing of the Economy + Escalation of Trade Friction = Safe-Haven Sell-Off
🎯 My View: Short-term fluctuations do not change the long-term bullish trend, focus on the policy shift window in May, and accumulate quality assets on dips!
Among the holders of Ethereum $ETH , only 44% are in profit, while 51% are at a loss. In contrast, among Bitcoin holders, 87% are still in profit. As the second cryptocurrency, Ethereum's performance is indeed disappointing.
BlackRock has been increasing its position in 28,718,913,900 Bitcoin in the past two days, and today bought another 300 BTC, worth over 25 million USD. Currently, its holdings have surpassed 568,500 Bitcoins, more than the combined total of MicroStrategy and Grayscale.
A whale bought another 1,000 bitcoins today, $BTC , worth more than 81 million US dollars. The market is always two-way. Some people panic sell, while others greedily buy at the bottom. They all operate based on their own analysis, judgment and funds.