Ethereum attempts to regain the $4.000 level after a week of high volatility

The Ethereum price is struggling to regain $4.000 following volatility triggered by trade tensions between the US and China. Meanwhile, the giants continue to accumulate, awaiting further interest rate cuts. 

The cryptocurrency market is facing a critical moment, and Ethereum reflects that tension clearly. After days of fierce volatility that shook investor confidence, the price of ETH is struggling to stay close to the psychological barrier of $4.000. 

Price tracking platform CoinGecko shows that currently, Ethereum is trading around $3.948, down 6,2% in the last week. However, this figure also reveals significant resilience, especially after the initial panic that erupted in the market.

The sharp decline experienced by Ethereum and the crypto market in general has been a direct consequence of geopolitical tensions, specifically the trade war between the United States and China. This tense situation triggered the largest wave of sell-offs in recent cryptocurrency history. 

Now, with calm slowly returning and diplomatic channels reopening, investors are facing a moment of uncertainty: assessing whether the worst is over or if they are merely at the center of an even deeper crisis. Next week will be key in defining the course of Ethereum and the crypto market in general.

The trade war that shook cryptocurrencies

The trade conflict between the United States and China sparked a global alarm that soon turned into a perfect storm for financial markets. President Donald Trump's threats to impose new tariffs on Chinese imports provoked an immediate response from Beijing with reciprocal tariffs, further straining trade relations and putting global commerce in jeopardy. This battle between two powers had a swift and profound impact, especially on risk markets, where cryptocurrencies took a severe hit from the outset.

What followed was a wave of massive sales never seen before. Within hours, Billions of dollars in leveraged positions were liquidated, disappearing from balance sheets and creating a domino effect of panic among investors. 

Ethereum, the second-largest digital currency, was one of the hardest hit assets. The support level near $4.000 was broken sharply, and the price plummeted to around $3.500. For many retail investors, this drop was a stark reminder that, despite the narrative that presents cryptocurrencies as an alternative safe haven, their performance remains closely tied to sentiment and fluctuations in traditional markets. The crisis demonstrated that liquidity and global risk sentiment continue to be the drivers that drive the crypto market in the short term.

Ethereum recovers after the geopolitical storm

However, just as quickly as the storm arrived, the first rays of light began to appear. The news that both economic powers had agreed to sit down at the table to resume trade negotiations brought immediate relief. 

Markets, including crypto, began a recovery. Ethereum began climbing from its lows of $3.500, embarking on a path to regaining lost ground. 

The weekly chart, visible on platforms like Coingecko, shows this V-shaped recovery, a climb that has brought ETH back to the $4.000 threshold. Although the current price, close to $3.950, remains below this level, there have been brief moments in recent days when it has surpassed the threshold, only to retreat slightly. This indicates a strong resistance zone, but also persistent demand.

On the other hand, while retail investors were still recovering from the shock, the ecosystem's largest players saw a golden opportunity. Reports indicate that industry giants, such as Bitmine, took advantage of the drop to "accumulate" significant positions at discounted prices. This "smart money" move is often interpreted as a sign of long-term trust in the asset, buying when prices retreat. 

Monetary Policy and Cryptocurrencies: Ethereum's Next Big Test

Now, market attention is shifting from geopolitics to monetary policy. All eyes are on the next decision by the U.S. Federal Reserve. In this context, there is growing expectation among experts that a possible interest rate cut later this weekA rate cut typically weakens the dollar and drives investors toward riskier assets, such as tech stocks and, of course, cryptocurrencies.

In this context, Ethereum is at a crucial juncture. The recent sell-off still weighs heavily on the market's memory, demonstrating how susceptible it is to global and economic news. However, the rapid recovery toward $4.000, driven by institutional investor accumulation and hopes for more flexible monetary policy, indicates that demand remains strong beneath the surface.

Therefore, next week will be crucial for ETH and the crypto market. If trade negotiations proceed smoothly and the Federal Reserve meets expectations of cutting rates, experts they point out that Ethereum could stabilize beyond $4.000 and even break new records.