Ethereum, the second-largest blockchain by market capitalization, fell by double digits over to highs of$ 2, 368 in the early hours of Monday, following U. S. President Donald Trump’s fresh tax presentations.
At time of publication, Ethereum is trading at$ 2, 544, down 17.8 % on the day, according to data from CoinGecko.
Across the broader crypto market, Ethereum led over$ 2.3 billion in total crypto foreclosures across 738, 000 dealers in 24 hours. According to CoinGlass data, Ethereum incurred the brunt with$ 611 million in combined long and short positions.
Nonetheless, that figure could still walk, with a recent statement from the co-founder and CEO of crypto change Bybit Ben Zhou claiming that the “real full bankruptcy” is” a lot more than$ 2B”, as shown by CoinGlass.
Zhou estimates that the true foreclosures on the crypto industry will be “at least$ 8-10 billion.” Based on Zhou’s state that Bybit’s procedures have an API restriction on how much data can be ingested into their feeds, these figures are based on this state. According to Zhou, another markets use the same principle to “limit liquidation data.”
Using available CoinGlass information, long merchants took the heaviest costs, accounting for$ 1.9 billion or 84 % of total liquidations, reflecting common optimistic setting as the accident ensued. $ 473 million made up of this total in ETH long positions.
” While most risk assets, including crypto, are trading lower, ETH has seen a notably steeper decline compared to BTC, SOL, and BNB. This continues the trend of ETH being one of the least favored trades this cycle, with ETH/BTC persistently making new lows”, Min Jung, analyst at Presto Research, told .
Jung raises questions about the controversies surrounding the Ethereum Foundation’s leadership and how it is trying to change its image toward institutions with recent developments like the launch of Etherealize. These have “further weighed on sentiment, exacerbating ETH’s underperformance”, Jung said.
The sudden crash also represents Ethereum’s largest intraday loss since May 2021, when it swept from an all-time high of$ 4, 308 to as low as$ 2, 200 in a matter of seven days, a report from Chainalysis details.
At press time, Ethereum sits roughly 48 % lower than its all-time time high at$ 4, 878 in November 2021, according to CoinGecko data.
V for volatility
Volatility metrics exploded during Asian trading hours today, with Ethereum’s one-day at-the-money volatility surging from 34 % to 184 %. Deribit’s ETH DVOL index, measuring expected price turbulence over four weeks, jumped from 67 % to 101 %.
For context, the Deribit ETH DVOL index is measured as forward-looking volatility, with the calculated value taken to mean the 30-day expectations over an annualized range.
As traders rushed to mitigate downside risk, the put-call ratio rose from 0.6 % to over 2.5 %, causing a market panic.
In their Asia Colour research note, analysts from QCP Capital stated that” this decorrelation reinforces the view that today’s risk-off move is driven by cross-asset portfolio rebalancing rather than a single-asset event.
A notable market during the day’s Ethereum drop involved a dormant whale transaction on Arkham, who deposited$ 288,6 million in ETH to Bitfinex shortly before the crash, which could increase selling pressure.
The severity of Ethereum’s decline, which far exceeded Bitcoin’s 4.7 % drop to$ 94, 438, highlighted the asset’s vulnerability to broader market factors.
The crypto market sentiment indicator now stands at “fear”, rated at 44, according to data from the Fear and Greed Index—though historically, such extreme levels have presented buying opportunities.
” Sell first, ask questions later. This market behavior is in line with previous instances where macroeconomic policy changes have suddenly affected liquidity. Jack Tan, co-founder of crypto exchange WOO X, told . This response reinforces the fact that crypto remains a terrible short-term hedge against fear and uncertainty, unlike gold, which has traditionally been used as a safe haven in turbulent markets.
Crypto bears fiat problems
The crash comes amid broader concerns about Trump’s trade policies, including new 25 % tariffs on Canada and Mexico, and 10 % on China. These measures have the potential to increase inflation in the global economy, putting strain on central banks ‘ efforts to lower interest rates.
The market had been primarily fixated on the DeepSeek saga, seemingly underestimating the geopolitical response and the threat of retaliation from foreign leaders, 10x Research tweeted.
The impact extended beyond crypto markets, with Dow futures falling more than 650 points early on Monday as European stocks and dollar gains followed.
” Recognize that tariffs frequently serve as a tool for ad hoc negotiations to achieve a goal. The ultimate objective is to find a multilateral agreement that would essentially create a Plaza Accord 2.0. Jeff Park, head of alpha strategies at Bitwise tweeted.
Park is referring to a 1985 agreement between the U. S., Japan, West Germany, France, and the U. K. to depreciate the U. S. dollar against the yen and Deutsche Mark, aiming to reduce U. S. trade deficit by making exports cheaper.
This implies potential trade imbalances could be addressed through policy interventions both for and among these fiat currencies.
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