Geopolitical tensions and macroeconomic factors have significantly impacted Ethereum's price movement today. The imposition of new tariffs between the US and China has unsettled markets, leading to a sharp decline in Ethereum's value. Analysts note that Ethereum's pivotal role in decentralized finance makes it particularly susceptible to leveraged trading dynamics, which have intensified the selloff. Despite a brief recovery following a trade agreement delay with Mexico and Canada, investor sentiment deteriorated as the tariff situation escalated, exerting further downward pressure on Ethereum. Additionally, a massive outflow of nearly $1 billion worth of Ether from centralized exchanges was observed, indicating that some investors are capitalizing on the price drop to accumulate Ether at lower prices. However, the overall market sentiment remains bearish, compounded by the ongoing trade war and the unwinding of Ethereum's deflationary effects post-Merge.
The Volatility Shares Trust 2x Ether ETF (ETHU) experienced a decline, dropping 3.98% to $4.34 as of 5:20 PM on Tuesday, February 4.