**Ethereum Faces Major Price Drop Risk as Investor Confidence Weakens**

Ethereum is at a crucial turning point as we move through 2025. After a sharp market sell-off, the price of Ethereum ($ETH) is struggling to hold above key support levels. The recent crash has raised concerns that Ethereum could fall below the $3,000 mark, which would be a major setback for the crypto market.

**Massive Liquidations Shake the Market**

Last Friday saw over $1 billion in crypto positions wiped out in a single day, affecting around 310,000 investors. Ethereum alone accounted for $269 million of those losses. This kind of large-scale liquidation often happens when traders use too much leverage and are forced to sell when prices drop suddenly. While this may help clear out risky positions, it also puts more pressure on the market and weakens the short-term outlook for Ethereum.

**Key Technical Signals Show Trouble Ahead**

Ethereum failed to break past the $4,200 resistance level and has since dropped back to around $3,730. What’s more concerning is that it slipped below its 100-day moving average, a key technical level it had held for months. The next major support sits around the 200-day moving average at $3,500. If Ethereum falls below that, dropping under $3,000 becomes more likely.

The Relative Strength Index (RSI), a tool used to measure buying and selling pressure, has dropped below 40. This suggests that sellers are in control right now. At the same time, trading volume is rising—often a sign that big investors are pulling back and becoming more cautious.

**Bitcoin’s Rejection Adds Pressure**

Part of Ethereum’s recent decline is tied to Bitcoin’s ($BTC) own struggles. When Bitcoin failed to stay above $120,000 last Friday, it triggered a wave of panic selling across the crypto space. Ethereum was hit especially hard because many traders had large leveraged long positions—bets that the price would go up—which made the downturn even worse.

**Sentiment Turns Bearish**

Right now, the overall mood among crypto investors is cautious and defensive. Analysts believe that any short-term bounce in Ethereum’s price—such as a temporary rise back above $3,500—is unlikely to change the current downward trend.

If Ethereum breaks below $3,000, it could mark the beginning of a longer bearish phase. With investor sentiment still weak and no strong recovery signs in sight, Ethereum’s bull run may be coming to a pause—or even an end—for now.

**What This Means for Ethereum and Altcoins**

Ethereum had a strong run earlier in 2025, but recent volatility has shaken confidence. Technical indicators still point to strong selling pressure, and unless investor interest returns soon, a deeper correction seems unavoidable.

This isn’t just about Ethereum. A fall below $3,000 could shift the entire direction of the altcoin market. Crypto traders and investors should watch closely—this could be a major pivot point for digital assets in general.

**Key Takeaways:**
– Ethereum’s price is under pressure after recent market liquidations.
– A drop below $3,000 could signal a deeper bearish trend.
– Technical indicators show strong selling momentum.
– Investor sentiment remains weak following Bitcoin’s rejection from $120K.
– This moment could define the next big move for Ethereum and the broader crypto market.

Always remember: Crypto markets are highly volatile. Make sure to do your own research and manage risks carefully.