Ethereum dipped on Sunday, hitting a low of $2,892. It opened trading at $3,162 but plummeted as the day progressed.
The 2-hour chart shows that the asset has seen a series of selloffs that started earlier (UTC) in the day. The first wave started at 2 a.m., when the coin dipped from $3,152 to a low of $3,068. A little attempt by the bulls kept prices above $3k for most of the session until another massive hit at 16:00. The apex altcoin dipped by almost 4%, plummeting from $3,0.81 to $2,950.
The coin sank lower a few hours later, rebounding at $2,892. Ethereum is yet to recover from the dip fully. However, it lost over 5% in the last 24 hours.
The second-largest coin joins the rest of the market as bearish sentiment affected almost all the cryptocurrencies in the top 100s. The global cryptocurrency market dipped by over 10%, slipping $3.41 trillion to $3.25 trillion. Trading volume increased by over 85% in the last 24 hours as selling pressure increased.
Why is Ethereum Down?
Ethereum dipped from news of the latest trade war between the US, Canada, China, and Mexico. US President Donald Trump on Saturday announced tariffs on import from the other three nations. It comes as part of his executive order and follows up on his campaign promises to deal a blow to the said countries.
The President cited the influx of illicit drugs from the three countries as the reason for the tariff. He announced a 25% duty on Canada and Mexico and a 10% duty on China. He claimed they are responsible for the inflow of fentanyl and death of over 107k deaths from it use in the US.
However, the United States’ northern neighbor refuted the claims and imposed a 25% tariff on all imports from the US. The nation said the latest move by the US is another bid to see it become its 51st state.
The crypto market plummeted as investors remain uncertain about the trade war implications on the US economy. Nonetheless, analysts warn of dire consequences. Companies importing goods from the affected nations will pay the extra cost and increase the prices of these goods. The affected goods include Vehicles, farm produce, lumber, and electronics.
Trade Association fears that the cost of these commodities will result in a higher cost of materials for building houses, raising housing costs.
Carl Harris, the chairperson of the US National Association, criticized the move, saying, “Further supply chain disruptions from increased tariffs coupled with increased demand for materials could also hinder rebuilding efforts in areas affected by natural disasters, the one he promised to rebuild.”
ETH Slightly Recovers
Ethereum slightly recovered following its dip below $2,900. It saw small buybacks that made it edge closer to the $3k mark. However, it grapples with significant selling pressure at the time of writing. The bulls are yet to soak up the excess supply.
The moving average convergence divergence displayed sell signals a few days ago. Its trend is ongoing the ETH is yet to recover from the downtrends fully. The 12-day EMA and 26-day EMA continue their decline for the same reason.
The relative strength index broke below 40 and trends at 36. Further price declines may see Ethereum become oversold.
