Ethereum price dropped below $2,900 for the first time in 5 weeks as recent geopolitical concerns drove investors away from the crypto market.

According to data from crypto.news, Ethereum (ETH) fell to an intraday low of $2,872 on Thursday morning Asian time after it lost the key $3,000 pyscologcial support level earlier on Tuesday.

Ethereum price dropped because investors had turned risk-averse after U.S. President Donald Trump threatened to impose tariffs on eight NATO allies if they did not cede or sell Greenland to the United States. Over the last few trading sessions, Investors were seen moving to safe-haven assets such as Gold and Silver as they awaited the macro environment to cool off.

Adding to this, a drop in institutional demand for Ethereum was also impacting retail sentiment. Data compiled by SoSovalue showed that investors had pulled out over $500 million from U.S. spot Ethereum ETFs over the past two days, an outflow trend not observed since mid-December last year.

A decline in institutional demand has often acted as a bearish catalyst for Ethereum, as seen earlier on Dec. 18 last year, where sustained outflows from major funds led the Ethereum price to drop by nearly 8% in a single week.

Ethereum price risks drop to $2,500

On the daily chart, Ethereum price has confirmed a bearish pennant pattern that had formed since early October last year. The pattern is formed when an asset’s price drops sharply, forming the flagpole, and is followed by a small, triangular consolidation area called the pennant.

Ethereum price has confirmed a bearish pennant pattern on the daily chart — Jan. 22 | Source: crypto.news

Traders typically enter a short position after the price decisively breaks the lower trendline of the pennant, as was the case for Ethereum price action.

Ethereum has also fallen below the 50-day SMA at $3,084, which has been acting as a dynamic level of resistance for the asset over recent weeks. Furthermore, the MACD lines have confirmed a bearish crossover, providing another sell signal for traders looking for momentum shifts.

Put together, these bearish indicators suggest that Ethereum could fall by 17% to $2,500, which is the next psychological support level, that has acted as a strong floor for the cryptocurrency during a volatile period in Q2 2025.

ETH price could recover as macro tensions ease

At the time of publication, the leading altcoin by market cap had managed to recover back above the $3,000 mark, supported by news that Trump has decided not to move forward with the tariffs after a “very productive meeting” with NATO Secretary General Mark Rutte in Davos

This development may provide temporary relief for Ethereum and could help fuel a recovery, especially if it manages to hold above $3,000.

Subsequently, a move back above $3,084 would invalidate the bearish forecast.