Ethereum experienced a significant downturn on February 5th, facing immense selling pressure that dramatically shifted market sentiment. This event saw the cryptocurrency's price plummet, triggering widespread liquidations and plunging the market into a state of "extreme fear," signaling a period of intense stress and de-risking for investors.
The February 5th Plunge and Market Fear
On February 5th, Ethereum [ETH] prices fell sharply by nearly 15%, dropping from $2,148 to $1,826. This dramatic decline led to approximately $466.4 million in liquidations, with the vast majority ($382 million) being long positions, indicating a broad expectation of price increases that was severely undermined. Concurrently, the Crypto Fear and Greed Index hit a low of 11, a level not seen since 2023, reflecting a pervasive sense of panic. Analysis also highlighted ETH's severe underperformance against Bitcoin, with the ETH/BTC ratio reaching a three-year low.
Breached Supports and Ominous Technical Signals
The price action demonstrated a decisive bearish dominance, with Ethereum bulldozing through critical psychological and demand zones. The $2,000 level, a key psychological support, was breached, alongside the $2,500 demand zone and the weekly swing point at $2,100, which failed to elicit any significant bullish reaction. Technical indicators further underscored the bearish momentum: the Relative Strength Index (RSI) plunged into oversold territory at 18.68, the lowest since August 2024, and the On-Balance Volume (OBV) also made a new low, confirming heavy sell volume and capitulation.
Navigating Future Price Trajectories
Looking ahead, market analysis suggests that liquidity below the current price has been largely wiped out, with significant magnetic zones for further downside concentrated around $1,500 and potentially lower. For traders, the lack of response at previous demand zones strongly implies that any short-term bounce could present a selling opportunity. Levels like $2,100 and $2,400 are identified as potential retest points where bearish reactions are likely, indicating that Ethereum may see a temporary recovery before facing its next downward impulse, possibly targeting the $1,500 range.
