Ethereum Plunges Amid Rising Inflation Fears
Ethereum’s price took a significant hit on Friday, plummeting over 6%.This decline is part of a downward trend that began on March 24 when it reached $2,105. The cryptocurrency fell to $1,880, its lowest as March 18, wiping out moast of its recent gains.
The drop coincided with the release of U.S.inflation data.The core Personal Consumption Expenditure (PCE) Index rose from 2.7% in January to 2.8% in February. The headline PCE hit 2.5%, exceeding the Federal Reserve’s 2.0% target. This suggests inflation will persist, possibly leading to prolonged higher interest rates.
Other assets also suffered. The S&P 500 fell by 1.50%, while the Nasdaq 100 and Dow Jones dropped by 2% and 1.2%, respectively. Cryptocurrencies like Bitcoin and Cardano also declined.
Economists warn that Donald Trump’s upcoming Liberation Day tariffs could trigger a recession, reversing some of Joe Biden’s economic progress. The fear and greed index dropped to 25, reflecting investor anxiety.
Wall Street remains cautious as ethereum faces challenges. SoSoValue data shows that spot Ethereum ETFs had inflows only once in March, adding $14.8 million in net assets on March 4. since then, assets have decreased, totaling $2.4 billion. All ethereum ETFs hold $6.86 billion in assets.
Ethereum is also losing market share in decentralized finance, non-fungible tokens, and decentralized exchanges to competitors like Sonic, Berachain, Base, and Arbitrum.
Technically,Ethereum’s price has formed a bearish flag pattern. If it breaks below the $1,537 level, it could signal further declines. However, a move above $2,131 would negate the bearish outlook.
