Ethereum Faces Downward Pressure as Tariffs Weigh on Market Sentiment
By John Nada·Feb 24, 2026·5 min read
Ether has slipped below $1,900, reflecting a 38% drop over the past month, driven by tariff-induced market sentiment and declining institutional demand.
Ether (ETH) has dipped below $1,900 during Asian trading hours on Tuesday, marking a significant 38% loss over the past month, as market sentiment shifts amid President Donald Trump's tariffs. This significant drop is causing concern among traders, with various indicators suggesting that ETH bears may not be done yet. The persistent uncertainty surrounding economic policies and their impact on the cryptocurrency market is heightening the anxiety among investors, leading to increased volatility in Ether's price.
The current market price of Ether at $1,830 is below its realized price of $2,380, a crucial on-chain metric that signals bearish conditions. The realized price recalibrates the market value based on the price at which ETH was last moved, effectively indicating the average cost basis of holders. Historically, when the realized price exceeds the spot price, it serves as resistance, potentially leading to panic selling among investors who find themselves under water. With many holders now facing losses, the prospect of capitulation becomes more likely, especially in light of the fear and uncertainty driven by tariff-related concerns.
Drops below the realized price have historically marked full capitulation phases in the market. For instance, in June 2022, Ether's spot price fell below its realized price, which preceded a drastic 45% drop in ETH following the Terra Luna market crash. A similar scenario occurred in August 2018, when a drop beneath the realized price led to a staggering 77% decline. The current setup closely resembles these previous instances, putting Ether's price at risk of a deeper correction.
Market analysis reflects that ETH price charts currently favor bearish trends. A key indicator, the 50-week exponential moving average (EMA), is still above the 100-week EMA, implying that ETH could face further declines until these averages signal a potential bottom. Traders are closely monitoring this relationship, as history shows that ETH did not find a bottom until the 50-week EMA crossed below the 100-week EMA. This type of cross has marked the end of every major bear market, including those in 2022 and 2018. Currently, the 50-week EMA is at $3,017, just above the 100-week EMA at $2,920, suggesting that the ETH/USD pair may fall further until these trendlines provide a clearer indication of a potential bottom.
Furthermore, traders are also observing a bear flag pattern, which has emerged after key support levels were lost. This pattern suggests that Ether may be on track to reach a target range of $1,400 to $1,500. The bear flag pattern is often recognized as a continuation pattern, indicating that the current downward momentum may persist before any substantial recovery attempts by bullish traders. This technical analysis reinforces the bearish sentiment in the market, which is compounded by ongoing concerns about regulatory actions and market sentiment.
The Ethereum Coinbase Premium Index, which tracks price discrepancies between exchanges, has dropped to a deeply negative value of -0.09. This index's decline indicates that much of the selling pressure is originating from U.S. retail traders, paralleling trends seen during the 2022 bear market. This bearish sentiment is further evidenced by the fact that the last time the 30-day simple moving average (SMA) was this negative was during the depths of the 2022 bear market. Extreme negative premiums have historically coincided with capitulation phases, and the current situation suggests that downside momentum will remain in place as long as U.S. investors continue to sell at a discount.
Moreover, the decline in institutional demand for Ethereum is notable. U.S.-based Ethereum ETFs have witnessed five consecutive weeks of outflows, the longest streak since April 2025. Investors have withdrawn nearly $1.3 billion from spot Ethereum ETFs during this period, with $123 million exiting the funds just last week, according to data from SoSoValue. This trend indicates that institutions are also contributing to the downward pressure on ETH prices. The combination of retail and institutional selling creates a formidable headwind for Ethereum, as confidence in the asset wavers.
As the cryptocurrency landscape evolves under these pressures, the implications for Ether and broader market stability are significant. The interplay between regulatory actions, market sentiment, and technical indicators will continue to shape the future of Ethereum. Trade volumes have been affected, and many investors are adopting a cautious approach as they navigate an uncertain market environment.
To provide further context, the broader economic landscape is also influencing the cryptocurrency market. President Trump's tariffs have created an atmosphere of apprehension among investors, as the potential for increased costs and economic strain raises questions about the stability of various markets, including cryptocurrencies. The correlation between traditional market movements and cryptocurrency prices has become increasingly apparent, leading to a challenging environment for digital assets like Ether.
In light of these developments, investors should remain vigilant as they assess their exposure to ETH and the overall cryptocurrency market. The current bearish trends, coupled with the negative sentiment stemming from tariffs and declining institutional interest, suggest that further declines could be on the horizon. The market's response to these dynamics will be critical in determining the next phase for Ether and its investors.
As Ether grapples with these challenges, it highlights the volatility inherent in the cryptocurrency market. Investors are urged to conduct thorough research and analysis before making any decisions, as the landscape is continually shifting. The ongoing fluctuations in ETH's price, along with the broader implications of economic policies, underscore the importance of staying informed and prepared for potential market movements. With further declines looming, the response from traders and investors will play a crucial role in shaping the future of Ethereum in this tumultuous market environment.