The Crypto Market’s February Bloodbath

The crypto market has experienced significant turmoil throughout February, with Bitcoin plunging to its 2021 low and currently trading at $86K. Ethereum, the second-largest altcoin, is also facing severe turbulence, dropping below $2,500 after a massive $1.5 billion hack on Bybit, allegedly orchestrated by North Korea’s Lazarus group, causing a 25% price crash. Analysts, including Benjamin Cowen, warn that ETH could decline even further, potentially sinking below $1,000 before any meaningful recovery.

Bearish Signals Stack Up

Ethereum’s recent price movements indicate a bearish trend, as its breakdown below crucial support suggests that further downside may be imminent. Current charts indicate that ETH might mirror previous capitulation events from April and August, potentially bottoming below $1,000. If history repeats itself, such a steep decline could be followed by a strong rebound, depending on favorable macroeconomic conditions.

The Federal Reserve’s stance on quantitative easing (QE) remains a critical factor influencing Ethereum’s outlook. At present, there are no signs that the Fed is prepared to inject liquidity into the markets, which could exacerbate the downward trend. Continued tight monetary policy may push Ethereum below $1,500, potentially reaching $1,200 or even sub-$1,000 before stabilizing.

Can Ethereum Recover?

A change in the Fed’s monetary policy could be the catalyst needed for Ethereum’s reversal. Historically, Ethereum has gained from increased liquidity after QE events, often leading to a surge in the ETH/BTC ratio. If the Fed reintroduces stimulus measures by March 2025, ETH could see significant recovery prospects.

Crypto analyst TraderPA believes Ethereum is currently oversold and trading within its largest historical order block. Despite the prevailing market bearishness, he remains confident in market charts, suggesting a potential rebound.

For the time being, Ethereum remains under heavy pressure, with analysts cautioning that the worst may not be over. However, if ETH manages to stay above $2,000 under improving market conditions, a recovery to the $3,500–$4,000 range could still be possible.