Ethereum price at risk of “falling knife”

The current trend of the price of Ethereum ignites the risk of a “falling knife“, that situation where one ends up “catching the knife while it is still falling”

There are those who believe that essentially the bottom might have been reached, and that the price of ETH is destined to rise again, but the issue is actually more complex

The “falling knife” risk on Ethereum

Grabbing a knife while it is still falling is an image commonly used to indicate a clear risk, namely that of ending up grabbing it by the blade and getting hurt

This image is also used in financial markets to indicate a similar concept, namely the purchase of an asset whose price is in a declining phase

While on one hand, the most convenient purchases are usually those made at very low prices, meaning after they have fallen, the risk of proceeding in this way is that the purchase may be followed by further declines

The key concept in this area is that of the “bottom“, meaning the lowest point. Since by definition the bottom is the lowest price of a given period, subsequent prices are higher, although unfortunately, this can often only be known in hindsight

So if you are not able to carefully identify the bottom, buying while prices are falling can end up meaning getting hurt, in case the bottom has yet to arrive

The bottom of Ethereum

The fact is that there is a data point suggesting that the bottom of the price of ETH in this phase might also be near.

This is the price of Ethereum in Bitcoin. In fact, the current level is about 0.022 BTC, which is the lowest since mid-2020.

In 2020 the bottom was reached at 0.021 BTC, before the rebound began, followed first by the bull run and then also by the altseason.

However, there is a problem

This bottom does not refer to the price of ETH in dollars, or fiat currencies or stablecoins. In other words, if the price of Bitcoin were to drop further, as seems possible, the price of Ethereum expressed in dollars could also decrease accordingly.

It is therefore not at all certain that ETH can hold the current $1,800, not even if it should hold the 0.022 BTC or drop slightly to 0.021

The difficulties of Ethereum

The prezzo di Ethereum has been struggling significantly since the second half of December, which is almost three months ago

After the end of the so-called Trump trade in November, the turning point was December 18, when the price of Bitcoin reached the peak of the Trump trade, and the price of gold began an ascent that is still ongoing and has brought it to historic highs

Ethereum on December 16 was above $4,000, and by the 20th it had already fallen below $3,300.

At the beginning of February, the crashes started, and there were as many as three

The first indeed at the beginning of February, with a drop below $2,500, the second at the end of February, below $2,200, and the third in March divided into two phases, the first of which saw it drop at the beginning of the month to $2,000, and the second this week which saw it drop even below $1,800.

In short, in three months it has lost even more than 50% of its market value

However, the current levels are really very low, especially because at the end of October, before the electoral victory of Trump, the price was around $2,500.

This on one hand reinforces the hypothesis that the bottom might have also been reached, but on the other hand suggests that the situation might still be critical

“html The decline of Bitcoin “

In such a scenario, the key point could be the trend of the BTC price in the coming months

The fact is that it could drop further, so much so that it is heading towards $74,000, or even below $70,000.

Should this happen, it seems really difficult for Ethereum to manage to hold the $1,800 level.

While on one hand it seems difficult for Ethereum to drop below 0.021 BTC, on the other hand, a drop of Bitcoin below $70,000 would mean an ETH price below $1,500 if the bottom at 0.021 BTC is reached

This is why there is talk of “falling knife” risk when buying Ethereum now

The coming months

However, this discussion might change in the coming months

At this moment, it is Bitcoin that is making the bull and the bear on the crypto markets, so everything depends on what the price of BTC will do in the coming months.

The idea circulating is that, even if the bottom of BTC has not yet been reached, in any case, in the second half of 2025, it might not only recover but also reach new heights

At that point, in the hypothetical case that this happens, even buying Ethereum at $1,800 could have turned out to be a bull

Of course, in the event that this happens after a drop of ETH below $1,500 it would have been even better to have bought it at the bottom, but none of this is certain, and therefore it is not at all said that it can be purchased at significantly better prices in the coming weeks or months

It should still be reiterated that the possible rebound in the second half of the year is by no means guaranteed, so this reasoning should be considered purely hypothetical at the current state, without any guarantee of success.