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Ethereum’s price plunged sharply on Sunday evening, dropping 18% amidst market anxiety and subsequent liquidations caused by trade war fears triggered by President Trump’s tariffs on Canada, Mexico, and China.
What’s the scoop?
- Heavy Liquidations: While some reports only show ~$2.3B in liquidations — of which
Ethereum accounted for $611M — Bybit’s CEO Ben Zhou estimated real liquidations number could near $8B. - Volatility Spike: ETH’s one-day implied volatility jumped above 180%, marking its steepest intraday slump since May 2021.
- Bearish Sentiment: Uncertainties around the chain’s direction, Ethereum Foundation leadership, and ETH/BTC’s downturn further weighed on ETH’s underperformance.
- Broader Turbulence: The tariffs impacted equity markets as well, with Dow futures plunging 650 points and crypto’s Fear and Greed Index slipping to 44.
Bankless Take
The beatings have been brutal for Ethereum, and the sharp drop not only underscores the continued interplay of macro events, but also the weight of negative sentiment around the chain. While ETH has since recovered to ~$2850, it remains ~10% down on the week. While this kind of pullback has historically lured opportunistic buyers, with tariffs injecting global uncertainty, an already “shaky” chain may need to firm up its sentiment base before growing further.
I am afraid that today real total liquidation is a lot more than $2B, by my estimation it should be at least around $8-10b. FYI, Bybit 24hr liquidation alone was $2.1B, As you can see in below screenshot, Bybit 24hr liquidations recorded on Coinglass was around $333m, however,… https://t.co/4WLkPxTYF4 pic.twitter.com/woTOHQvNkt
— Ben Zhou (@benbybit) February 3, 2025
