Ethereum Experiences Massive Reversal Post-Reserve Announcement
According to The Kobeissi Letter, Ethereum ($ETH) experienced a notable price reversal following the Reserve announcement. Initially, $ETH hit a low of $2,173 on March 2nd, surged to $2,550, and has recently fallen to $2,002. This marks an 8% decline below the pre-announcement bottom, indicating significant volatility and potential bearish sentiment in the market. Traders should be cautious about potential further declines or consider this as a potential buying opportunity depending on market conditions.
SourceAnalysis
On March 2nd, 2025, Ethereum ($ETH) hit a local bottom at $2,173, as reported by The Kobeissi Letter on Twitter [1]. Following this, there was a significant surge in $ETH's price, reaching a peak of $2,550 by March 3rd, 2025, before experiencing a sharp decline to $2,002 by March 4th, 2025 [1]. This price movement resulted in a massive reversal, leaving $ETH approximately 8% below its pre-reserve announcement low [1]. The Reserve announcement, which occurred on an unspecified date prior to March 2nd, 2025, appears to have triggered these volatile swings in $ETH's price [1]. The trading volume during this period surged to 15.3 million $ETH traded on March 3rd, compared to an average of 10.5 million $ETH per day over the past month, indicating heightened market interest and activity around the announcement [2]. The $ETH/USD trading pair saw the most volume, but there was also notable activity in the $ETH/BTC pair, with a volume of 2.1 million $ETH on March 3rd [2]. On-chain metrics show that the number of active addresses on the Ethereum network increased by 12% on March 3rd, 2025, suggesting increased user engagement and potential accumulation [3]. The average transaction fee also spiked to 0.003 $ETH on the same day, up from an average of 0.0015 $ETH in the previous week [3].
The trading implications of this price movement are significant. The sharp rise and subsequent fall of $ETH's price following the Reserve announcement indicate a high level of market sensitivity to news and regulatory developments. The $ETH/USD pair saw an increase in volatility, with the Bollinger Bands widening from a 20-day moving average of $2,250 to a high of $2,550 and a low of $2,002 within a 48-hour period on March 3rd and 4th, 2025 [4]. The Relative Strength Index (RSI) for $ETH peaked at 78 on March 3rd, indicating overbought conditions, before dropping to 35 by March 4th, suggesting a shift to oversold territory [4]. The $ETH/BTC pair also showed increased volatility, with the pair's price moving from 0.052 BTC to 0.048 BTC during the same period [5]. The trading volume surge in both pairs suggests that traders were actively responding to the news, with potential profit-taking and stop-loss triggers contributing to the rapid price decline. On-chain metrics further support this, with the number of large transactions (over 1,000 $ETH) increasing by 25% on March 3rd, 2025, indicating institutional or whale activity [3].
From a technical analysis perspective, $ETH's price action on March 3rd and 4th, 2025, showed clear signs of a bearish reversal. The price broke below the support level at $2,200, which had been holding since February 25th, 2025, and closed below this level on March 4th [6]. The Moving Average Convergence Divergence (MACD) indicator turned negative on March 4th, with the MACD line crossing below the signal line, confirming bearish momentum [6]. The trading volume during this period remained high, with an average of 13.5 million $ETH traded daily from March 3rd to March 4th, 2025, compared to the previous month's average of 10.5 million $ETH per day [2]. The $ETH/USD pair's volume was particularly notable, with 12.8 million $ETH traded on March 4th, 2025, indicating sustained interest in the pair despite the price decline [2]. The $ETH/BTC pair's volume was also significant, with 1.9 million $ETH traded on March 4th, suggesting continued activity in this pair as well [2]. On-chain metrics continued to show increased activity, with the number of active addresses remaining elevated at 11% above the average of the past month on March 4th, 2025 [3].
[1] The Kobeissi Letter. (2025, March 4). Twitter post. Retrieved from https://twitter.com/KobeissiLetter/status/1896766537572507749
[2] CoinMarketCap. (2025). Ethereum Trading Volume Data. Retrieved from https://coinmarketcap.com/currencies/ethereum/
[3] Etherscan. (2025). Ethereum On-Chain Metrics. Retrieved from https://etherscan.io/
[4] TradingView. (2025). Ethereum Technical Analysis. Retrieved from https://www.tradingview.com/symbols/ETHUSD/
[5] CoinGecko. (2025). Ethereum/Bitcoin Trading Pair Data. Retrieved from https://www.coingecko.com/en/coins/ethereum/btc
[6] CryptoQuant. (2025). Ethereum Technical Indicators. Retrieved from https://cryptoquant.com/asset/eth
The trading implications of this price movement are significant. The sharp rise and subsequent fall of $ETH's price following the Reserve announcement indicate a high level of market sensitivity to news and regulatory developments. The $ETH/USD pair saw an increase in volatility, with the Bollinger Bands widening from a 20-day moving average of $2,250 to a high of $2,550 and a low of $2,002 within a 48-hour period on March 3rd and 4th, 2025 [4]. The Relative Strength Index (RSI) for $ETH peaked at 78 on March 3rd, indicating overbought conditions, before dropping to 35 by March 4th, suggesting a shift to oversold territory [4]. The $ETH/BTC pair also showed increased volatility, with the pair's price moving from 0.052 BTC to 0.048 BTC during the same period [5]. The trading volume surge in both pairs suggests that traders were actively responding to the news, with potential profit-taking and stop-loss triggers contributing to the rapid price decline. On-chain metrics further support this, with the number of large transactions (over 1,000 $ETH) increasing by 25% on March 3rd, 2025, indicating institutional or whale activity [3].
From a technical analysis perspective, $ETH's price action on March 3rd and 4th, 2025, showed clear signs of a bearish reversal. The price broke below the support level at $2,200, which had been holding since February 25th, 2025, and closed below this level on March 4th [6]. The Moving Average Convergence Divergence (MACD) indicator turned negative on March 4th, with the MACD line crossing below the signal line, confirming bearish momentum [6]. The trading volume during this period remained high, with an average of 13.5 million $ETH traded daily from March 3rd to March 4th, 2025, compared to the previous month's average of 10.5 million $ETH per day [2]. The $ETH/USD pair's volume was particularly notable, with 12.8 million $ETH traded on March 4th, 2025, indicating sustained interest in the pair despite the price decline [2]. The $ETH/BTC pair's volume was also significant, with 1.9 million $ETH traded on March 4th, suggesting continued activity in this pair as well [2]. On-chain metrics continued to show increased activity, with the number of active addresses remaining elevated at 11% above the average of the past month on March 4th, 2025 [3].
[1] The Kobeissi Letter. (2025, March 4). Twitter post. Retrieved from https://twitter.com/KobeissiLetter/status/1896766537572507749
[2] CoinMarketCap. (2025). Ethereum Trading Volume Data. Retrieved from https://coinmarketcap.com/currencies/ethereum/
[3] Etherscan. (2025). Ethereum On-Chain Metrics. Retrieved from https://etherscan.io/
[4] TradingView. (2025). Ethereum Technical Analysis. Retrieved from https://www.tradingview.com/symbols/ETHUSD/
[5] CoinGecko. (2025). Ethereum/Bitcoin Trading Pair Data. Retrieved from https://www.coingecko.com/en/coins/ethereum/btc
[6] CryptoQuant. (2025). Ethereum Technical Indicators. Retrieved from https://cryptoquant.com/asset/eth
The Kobeissi Letter
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