Ethereum falls slightly after news that Trump canceled negotiations with Canada, stocks still rise.

Ethereum (ETH) has fallen 1% in the past 24 hours, continuing to face strong resistance at the $2,500 mark, halting the bounce back. This adjustment comes right after the unexpected announcement by President Donald Trump about ending trade negotiations with Canada, adding to market instability.

Ethereum shows weakness as Donald Trump cancels trade talks with Canada

While Ethereum and most of the cryptocurrency market remain stuck in a narrow trading range, Wall Street experienced a vibrant trading session on Friday, with both the S&P 500 and Nasdaq Composite setting new historical highs.

This breakout comes right after U.S. Secretary of Commerce, Mr. Howard Lutnick, confirmed that Washington and Beijing have finalized a trade agreement. However, the rapid increase was quickly curtailed when President Donald Trump unexpectedly announced the termination of all trade negotiations with Canada.

“We have just received information that Canada – a country that has long posed difficulties in trade relations, exemplified by their imposition of tariffs as high as 400% on dairy products from American farmers – has now decided to tax Digital Services targeting our technology companies. This is a direct and blatant act against America,” Trump wrote on Truth Social.

“With this unreasonable tax action, we officially terminate ALL trade negotiations with Canada, effective immediately. Within the next seven days, America will announce the new tax that Canada must bear if it wishes to continue trading with us,” he emphasized.

Immediately after the announcement, Ethereum continued to face adjustment pressure as it fell another 1%, dropping below the $2,400 threshold. Notably, the weighted sentiment index of ETH also slid to a low equivalent to the beginning of March – when President Trump initiated a series of controversial tariff policies. This development reflects a significant decline in the expectations of retail investors, despite positive information from the ceasefire between Israel and Iran.

The Weighted Sentiment Index (7DMA) of ETH | Source: SantimentThe market’s confusion is also reflected in the funding rate of ETH – continuously shifting to negative levels over the past week. This is a signal that the lack of direction and trust is being eroded, despite ETH having recorded a slight bounce back at the beginning of the week.

The funding rate of ETH | Source: CoinglassMarket sentiment is currently quite weak, largely stemming from the caution of investors ahead of the recent series of macroeconomic shocks – factors that have made the overall picture more unpredictable than ever.

Ethereum Price Forecast: ETH Risks a 35% Fall if the “Death Cross” Signal is Confirmed

In the past 24 hours, the Ethereum futures market has witnessed a total liquidation value of 50.31 million USD, according to data from Coinglass. Notably, most of this came from long positions (Long) with 35.38 million USD, while short positions (Short) only accounted for 14.93 million USD – indicating that buyers are under significant pressure.

After the sharp drop to $2,110 last week, ETH has bounced back 8.5% this week, bringing the price back to the familiar range of $2,300 to $2,800 – where it has mostly held since the strong growth earlier in May.

ETH/USDT Weekly Chart | Source: TradingViewOn the weekly time frame, concerning technical signals are gradually forming: the 50-week Simple Moving Average (SMA) is approaching a potential crossover below the 100-week SMA – a sign of an impending “death cross” (death cross). The last time this pattern appeared was from October to early November 2022, when ETH plummeted sharply by 35%, from $1,680 down to just $1,080. Conversely, when the 50-week SMA crossed above the 100-week SMA in January 2024, the price of ETH bounced back over 90%.

If this pattern repeats under current market conditions, ETH risks losing key support areas and sliding deep towards the $1,700 region.

Currently, the relative strength index (RSI) is fluctuating around the neutral threshold, while the Stochastic Oscillator is approaching the overbought area. If both indicators are rejected, the bearish trend may continue to be reinforced. Conversely, if they break out successfully, buying pressure may gain significant momentum.

The important resistance level at $2,850 is playing a key role: if it is breached, the bearish scenario will be invalidated and ETH may be pushed to a higher price range around $3,400.

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