Ethereum Plunges Below $2K, Risks 40% Correction

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has been experiencing a significant price retracement in recent weeks. On Tuesday, ETH retested the $2,000 support zone, falling below this level for the first time in over a year. Some analysts have suggested that the cryptocurrency risks a 40% correction as its price attempts to hold its support level "between heaven and hell."

Ethereum has fallen to a yearly low of $1,993, according to Binance market data. The cryptocurrency has dropped below $2,000 for the first time in 15 months, hitting its lowest price since late November 2023. Amid the February market retraces, ETH failed to hold the $3,000 level, hovering between the $2,500 and $2,800 price range for most of the month, despite the February 3 market crash to $2,100.

The end-of-month correction saw Ethereum bleed 17% to a new low of $2,076. Per Coinglass Data, the King of Altcoins closed last month with a 31.95% decline, registering its first February Close with red numbers since 2018. ETH recovered 17% on Sunday, attempting to reclaim the $2,500 resistance level after US President Donald Trump announced the establishment of a "Crypto Strategic Reserve," which will have Bitcoin and Ethereum "at the heart" of it.

On Monday, ETH fell below the $2,000 mark during the market's dump and risks dropping another 40%. Ali Martinez highlighted that Ethereum could fall as low as $1,250 if it doesn’t reclaim some key levels. The analyst noted that Ethereum has been consolidating in a parallel channel since 2024, bouncing from the channel’s upper boundary to the middle or lower boundary before bouncing back to the upper zone.

Nonetheless, ETH broke below the channel’s lower boundary after dipping below $2,200 last week. If the cryptocurrency doesn’t reclaim the channel’s lower boundary, its price could retrace to the $1,600 or even $1,250 support zones. Martinez noted that