Ethereum’s recent 10.97% drop to $1,904.46 reflects its deep entanglement with broader macroeconomic currents rather than any internal weakness in its network or ecosystem. The decline unfolded amid a sweeping risk-off episode that gripped both traditional and digital asset markets, with Ethereum moving in near lockstep with Bitcoin—which fell 10.71%—and exhibiting a striking 91.6% correlation with the S&P 500. This high-beta behavior underscores how, in times of stress, ETH functions less as a standalone technology investment and more as a leveraged proxy for liquidity-sensitive assets.
The catalyst for this selloff was a confluence of macro fears: rising concerns over monetary policy tightening, geopolitical uncertainty, and speculation around sovereign actors repositioning crypto holdings—all of which triggered a flight from risk. Market sentiment plummeted into “Extreme Fear,” with the Crypto Fear & Greed Index dropping to just 5. Compounding the pressure, over $1 billion in Bitcoin leveraged positions were liquidated within 24 hours—a figure consistent with reports of more than $2.5 billion in total crypto liquidations during early February 2026. This forced deleveraging rippled across the market, dragging down the entire Layer 1 sector by 10.12% and leaving no refuge for major altcoins like Ethereum.
Technically, Ethereum now hovers near critical support levels. The 61.8% Fibonacci retracement at $1,915 has already been tested, with stronger structural support sitting at $1,842. The RSI, at 40.76, suggests the asset is approaching oversold territory, raising the possibility of a counter-trend bounce if macro conditions stabilize. A successful hold above $1,842 could pave the way for a relief rally toward $2,000, particularly if Bitcoin stabilizes above $60,000 and equity markets recover. Conversely, a breakdown below this level—especially amid continued outflows from Bitcoin ETFs—could open the door to a deeper correction toward $1,750.
In sum, Ethereum’s slide is not a reflection of protocol-level issues but a symptom of a broader market recalibration driven by macro liquidity dynamics and excessive leverage. Its fate in the near term remains tethered to the performance of Bitcoin and U.S. equities, reinforcing its role as a barometer of risk appetite in the digital asset space.