Will Trump’s trade tensions with Canada force ETH to fall?

Ethereum briefly fell below $2,400 on Friday after American President Donald Trump abruptly halted trade talks with Canada. The S&P 500 and Nasdaq remained high following the US-China trade agreement, but the crypto markets were less hopeful.   The news that Canada might tax US tech giants’ digital services triggered a wave of risk-off sentiment in digital assets.  Ethereum, in particular, saw its financing rates and retail sentiment plummet.

Trump’s Truth Social post claimed that Canada had unfair tariffs and a digital tax war, and he pledged to retaliate with duties within a week.   This was a huge surprise to crypto investors who were already cautious.

Bearish technical signals indicate a need for caution

While technical indicators raise red signals, ETH’s price action is testing critical support. A death cross is forming, which suggests the 50-day Simple Moving Average is about to fall below the 100-day.  This is comparable to the events preceding Ethereum’s 35% plunge in late 2022.   If history repeats itself, ETH may once again assault support levels near $1,700.

On-chain data provides a similar story.   Coinglass reports that more than $50 million in ETH futures were sold in 24 hours, indicating that the market is extremely volatile and that consumers are unsure what to do. Ethereum’s weighted sentiment also dropped to levels not seen since early March, indicating that retail traders are turning bearish.

What to Watch Out for Next

It is still critical for bulls to return to $2,850.   A close above that level might revive chances of an advance above $3,400.   Until then, Ethereum’s trajectory remains uncertain, as the RSI is near neutral and the Stochastic Oscillator is approaching overbought zone.  This is becoming increasingly tied to geopolitical events.

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