Ethereum price fell below $2,900 for the first time in five weeks as recent geopolitical concerns drove investors away from the crypto market.
summary
- Ethereum price briefly fell to a five-week low of $2,872 on Thursday.
- Geopolitical concerns and a wave of outflows from ETFs affected market sentiment.
- A bearish pennant pattern was confirmed on the daily chart.
According to data from crypto.news, Ethereum ($ETH) fell to an intraday low of $2,872 on Thursday morning Asian time, after losing the key psychiatric support level of $3,000 early Tuesday.
Ethereum prices fell as investors became risk-averse after US President Donald Trump threatened to impose tariffs on eight North Atlantic Treaty Organization (NATO) allies unless they cede or sell Greenland to the US. The last few trading sessions have seen investors move into safe-haven assets such as gold and silver as they wait for the macro environment to calm down.
In addition to this, a decline in institutional demand for Ethereum was also impacting retail sentiment. Investors have withdrawn more than $500 million from U.S. Spot Ethereum ETFs in the past two days, according to data compiled by SosoValue, an outflow trend not observed since mid-December of last year.
Declining institutional demand often acts as a bearish catalyst for Ethereum, as seen early on December 18 of last year, with sustained outflows from major funds causing Ethereum prices to fall nearly 8% in one week.
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On the daily chart, Ethereum price confirmed the bearish pennant pattern that has been forming since early October last year. This pattern forms when asset prices fall sharply to form a flagpole, followed by a small triangular area of consolidation called a pennant.
Ethereum price confirms bearish pennant pattern on daily chart — January 22 | Source: crypto.news
As with Ethereum price movements, traders typically enter short positions after the price definitively breaks through the lower pennant trendline.
Ethereum is also below its 50-day SMA of $3,084, which has served as a dynamic resistance level for the asset in recent weeks. Additionally, the MACD line confirms a bearish crossover, providing another sell signal for traders looking for a change in momentum.
Taken together, these bearish indicators suggest that Ethereum could fall by 17% to the next psychological support level at $2,500, acting as a strong downside for the cryptocurrency during a volatile period in Q2 2025.
$ETH Prices could recover if macro tensions ease
At the time of publication, the top altcoin by market capitalization was able to regain the $3,000 mark, buoyed by the news that President Trump had decided not to move forward with tariffs after a “very productive meeting” with NATO Secretary-General Mark Rutte in Davos.
This development could provide temporary relief to Ethereum and could help fuel a recovery, especially if Ethereum is able to sustain above $3,000.
A subsequent move back above $3,084 will invalidate our bearish prediction.
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