When Tariffs Meet Technicals: ETH at $3680 Faces a Powder Keg Moment

The trade war ignites fresh havoc in crypto markets. Ethereum’s critical support level has become a death powder waiting to explode—here’s what you need to know before the next swing.

The Policy Shock Sends Ripples Through Crypto

The crypto landscape shifted dramatically when the U.S. announced sweeping 25% tariffs targeting Indian goods over alleged oil reselling schemes. For risk-sensitive assets like Ethereum, this geopolitical tremor arrived at the worst possible time. ETH, which opened August 5 at $3678.81, briefly spiked to $3735 before retreating. By 10:00 AM, it had settled near $3681.54 with minimal gains—the calm before potential chaos. Current readings show ETH hovering around $2.93K, reflecting the ongoing pressure.

Technical Breakdown: Warning Lights Are Flashing

The technical picture reveals a market perched on a knife’s edge. The Bollinger Band’s upper boundary at $3768 now functions as formidable resistance, while the lower band at $3515 represents dangerous territory. A breakdown below that level could trigger cascading liquidations across leveraged positions.

Fibonacci retracement levels paint an equally precarious picture. The 20% retracement at $3678 essentially coincides with current price levels—a knife-edge alignment that demands caution. Should this level crumble, the 38.2% retracement zone near $3627 becomes the next battleground. Meanwhile, the crocodile indicator signals an intensifying squeeze between bulls and bears, suggesting that directional clarity is imminent.

Historical Echoes: February’s 27% Crash Still Fresh

Trump’s tariff announcements aren’t new to the crypto market’s playbook. Back in February 2025, a similar move targeting Canada and Mexico prompted ETH to nosedive 27% in a single day—plummeting to $2135 in what became the steepest single-day collapse since May 2021. This historical precedent has traders bracing for another potentially severe correction.

The current situation has already sparked significant portfolio unwinding. Over 700,000 traders faced liquidation within 24 hours during the initial panic, with roughly $2.04 billion in open positions extinguished. Long positions accounted for 87% of those liquidations, revealing heavy retail exposure to the upside.

Where’s the Powder Keg: Retail vs. Institutional Behavior

A death powder lurks in the disconnect between institutional and retail positioning. While some institutional capital—including BlackRock’s iShares Bitcoin Trust, which recorded over $4 billion in net inflows within a single week—appears positioned to capitalize on weakness, retail panic-selling is reinforcing downward momentum. If the trade war escalates or additional nations join retaliatory measures, ETH could face a 10%-20% correction without breaking a sweat.

The Critical $3680 Line: Last Stand or Mere Pause?

Ethereum’s current price action around $3680 represents a convergence zone where technical support meets psychological resistance. The BOLL upper boundary at $3768 and the 0% Fibonacci retracement level at $3735 create a double ceiling overhead. Should bulls lose the $3680 level, the next meaningful support materializes around $3627.

What Could Change the Narrative

Two variables could reset expectations:

Policy developments – If negotiators reach an agreement before the August 7 tariff deadline, risk sentiment could shift sharply higher, erasing near-term losses.

Institutional capital reallocation – Continued inflows into Bitcoin-focused products could eventually spill into altcoins like ETH, reversing the bearish technicals.

The Unfolding Drama

ETH finds itself in a classic setup: squeezed between policy uncertainty above and technical breakdown risk below. The $3627 support zone represents the true last bastion for bulls; a break there invites further downside exploration. In the immediate term, either delayed tariff policies or fresh fund deployment could provide relief, but the structural pressure remains undeniable.

Trump’s tariff salvo has ignited volatility across digital asset markets, and Ethereum’s technical breakdown at $3680 isn’t merely a number—it’s a potential catalyst for chain reactions across the crypto ecosystem. Whether the next week brings a bloodbath or a tactical rebound depends entirely on policy signals and capital flows. The game is afoot, and the rules are being written in real time.