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>>The US‑China tensions hit Ethereum, triggering a price drop and a slowdown in the derivatives market

The US‑China tensions hit Ethereum, triggering a price drop and a slowdown in the derivatives market

crypthub

about 11 hours ago

Trade Tensions and Market Shock

Last Friday US‑China trade frictions surged, sparking the biggest crypto liquidation ever. Ethereum fell sharply, breaking key technical supports and dragging the derivatives market down. The collapse erased over $19 billion in leveraged positions and affected more than 1.6 million traders.

Technical Breakdown and Recovery

CryptoQuant’s 30‑minute chart showed buyers holding early zones, then price slipping below EMA‑96, SMA‑240 and the up‑trend AVWAP in zones 4‑5. Chinese export‑control news and Trump’s tariff threats turned those supports into resistance, confirming seller dominance. After diplomatic signals from Trump and Vice President Vance, buyers regained control, pushing ETH back above all major averages.

Derivatives Fallout and Institutional Reset

Open interest plunged from a $33 billion peak to about $18 billion, a 45 % drop that cooled speculative leverage. Institutional demand rose, with the Coinbase Premium Index hitting its yearly high and providing a floor near $4,100. The forced deleveraging left a healthier market foundation for future accumulation.