Ethereum (ETH) crashes below $2,000 for the first time since 2023 bear market

According to Binance trading data, Ethereum (ETH) dipped as low as $1,993, later recovering to $2,050. The token reached its lowest level since April 2023, dashing the recent hopes of a recovery.

Ethereum (ETH) keeps sliding, with a recent short-term dip on Binance. The asset slid to $1,993, the lowest price since April 2023. ETH is now back to bear market territory, despite expectations for a favorable performance in Q1.

ETH dipped to $1,993 on Binance, later recovering above $2,000 with renewed whale buying. | Source: Binance

ETH fell along with the rest of the market, though it also faced its own set of pressures. The asset slid further down to 0.025 BTC, also delaying a breakout against the leading coin. Soon after dipping under $2,000, ETH recovered to $2,138,65. The bounce is yet to prove a shift in attitudes, as the crypto market still trades on fear.

During the latest price dip, there were again multiple theories on the price action. The main reason was the overall weak sentiment for altcoins. Crypto also tracked stock markets with another slide, responding to the newly enforced trading tariffs according to President Trump’s plan.

ETH open interest falls to last November’s levels

The current ETH price action happens with an open interest of $9.8B. ETH round-tripped the US elections narrative, with open interest peaking above $16B in December.

Interest in ETH is simply slower as traders see the asset as a long-term loss. ETH is also sliding along with the rest of the altcoin market. The loss of token value also means fewer users of the Ethereum chain and general doubts about its future utility.

ETH fell as the Altcoin Season Index slid to its lower range of 22 points. Later, the index recovered to 24 points, but most formerly hot assets have already gone through deep drawdowns and traders remain cautious.

ETH is traditionally considered the driver of an altcoin season, but the fatigue from meme trading and overall volatility on the markets brings additional caution for traders. ETH is also an exception, as most other assets have a shift to bullish sentiment. Both retail and smart money turned bearish on ETH in the past day.

$ETH Sentiment

CROWD = Bearish 🟥
MP | #SmartMoney = Bearish 🟥 #Ethereum
Check out sentiment and other crypto stats at https://t.co/HQDyBNuzek#Crypto #Marketprophit pic.twitter.com/iHxnNi1dWV

— Market Prophit (@MarketProphit) March 4, 2025

In the past year, ETH also fell after its long-term vision was challenged. The token remained inflationary, while the Ethereum Foundation did not build tools for scaling. Traffic and liquidity also shifted to L2 chains. Ethereum’s main utility was to carry Tether (USDT) and offer a platform for Uniswap’s main activity. Holding ETH was also needed to secure the network and serve as collateral, though those functions are already filled by older whales.

Sellers may be deliberately wrecking ETH

Another theory is that ETH is pressured by spot selling, with the goal of liquidating any remaining long positions. Despite the price drop, over 74% of ETH positions are long. Liquidity has been building up all the way down to $1,900.

ETH also made a rapid recovery, which squeezed out short positions above $2,000. However, the risk of long liquidations remains high.

ETH seems attractive at the $2,000 price range, especially if a long-term rally is still expected. Whale buying continues, though even smart money has been stuck due to unexpected crashes.

We caught a TRAPPED whale—yes, even whales get stuck!
This whale, who previously bought low, sold high, and made $33.67M on $ETH , is now struggling.

After adding positions and getting #trapped , they just bought another 2,000 ETH ($4.1M) to try and lower their average price. pic.twitter.com/JYK9i6m0XJ

— EyeOnChain 🔶 (@EyeOnChain) March 4, 2025

Smaller whales are also buying the dip, for purchases of up to $10M. ETH may be seen as shaky, but accumulation continues, for whales that can afford to wait for a breakout.

Another theory is that Trump’s World Liberty Fi may be capable of swaying the markets. In February, the fund moved most of its ETH out of its wallets and may have prepared to sell. Currently, sellers can also re-buy at a lower price. The ETH dip also allows whales to cover loans.

ETH also saw selling pressure from the Bybit hacker, who managed to swap out nearly 500K ETH within days.

Source