Trump's Trade War Threats Send Ether Plunging

Ether (ETH), the second-largest cryptocurrency by market capitalization, is currently testing levels not seen since November 2023. The market has been experiencing significant volatility, largely driven by U.S. President Donald Trump's trade war threats.

In the last 24 hours, ETH has declined by 15%, according to CoinDesk Indices data. This downturn has also dragged down the CoinDesk 20, a measure of the largest digital assets, which has seen a 16% decrease.

Ether's decline over the past three months has been influenced by bearish investor sentiment, as reflected in its underperformance relative to BTC and weak institutional demand. Additionally, macroeconomic factors such as trade war fears, inflation concerns, and stock market weakness have dampened risk appetite, contributing to the overall decline.

CoinGlass data indicates that nearly $165 million in ETH long positions have been liquidated in the last 12 hours, highlighting the intense selling pressure in the market.

Despite the current bearish sentiment, some market participants remain optimistic about ETH's prospects. Bettors on Polymarket are giving a 76% chance of ether hitting $1900 by the end of the month, suggesting that there is still confidence in the asset's long-term potential.

However, recent data from SoSoValue indicates that ETH ETF outflow was deep in the red last week, coming in at -$335 million. This suggests that investors may be reducing their exposure to ETH, potentially contributing to the current price decline.