Ethereum (ETH) witnessed a sharp 20% decline over three days, dropping to a low of $2,255. However, the price has now stabilized around $2,300, bringing some relief to investors.
Early signs of recovery in the ETH derivatives market suggest that Ethereum could potentially rebound to $2,800 in the coming weeks.
Signs of Recovery in the ETH Futures Market
Over the past 30 days, ETH futures premiums have risen to 7%, up from 6% two days ago. Typically, a 5% to 10% futures premium is considered neutral, as traders expect higher returns for longer settlement periods.
This shift indicates that bearish pressure below $2,600 is weakening, which could boost confidence among bullish investors.
Weak Global Economic Conditions Could Slow ETH’s Recovery
Although data suggests that Ethereum may have bottomed out, the speed of its recovery depends on several economic factors.
Recent U.S. economic reports have raised concerns among investors:
- U.S. Jobless Claims: The number of new unemployment claims for the week ending Feb. 22 surged to 242,000, the highest in three months.
- U.S. Housing Market: Pending home sales in January fell by 4.6%, reaching an all-time low.
Geopolitical Tensions & Trade War Concerns
U.S. President Donald Trump recently announced new tariffs on imports from China, Canada, and Mexico, adding to market uncertainty.
Additionally, Trump threatened a 25% tariff on European Union (EU) imports, prompting the EU to warn of a strong retaliatory response. These trade tensions could contribute to further market instability.
Market-Wide Declines Weigh on Sentiment
- Nvidia’s stock dropped 3.3% on Feb. 27, despite strong quarterly earnings and guidance.
- Gold prices fell 2.2% in two days, hitting a two-week low of $2,870, signaling broader market concerns.
What’s Next for Ethereum?
Ethereum’s rebound to $2,800 remains possible, but it will depend on global economic stability and investor sentiment. Weak U.S. economic indicators and growing trade war tensions could keep pressure on the crypto market.
For now, investors should remain cautious and take a long-term approach to ETH investments.
