From Record High to Sharp Decline: Ethereum Erases Jackson Hole Rally Gains

The cryptocurrency market experienced dramatic swings over the weekend, with Ethereum reaching new heights before crashing back down. Ethereum’s record high was quickly given back as broader market sentiment shifted dramatically within hours.

According to CNBC, Ethereum slipped 6% to $4,548.32 on Monday as per Coin Metrics. This came after it surged to a new record of $4,954.81 on Sunday, following an earlier all-time high on Friday, since 2021.

Ether had surged following positive signals from the Jackson Hole economic symposium. However, the gains proved short-lived as selling pressure mounted across all major digital assets.

Weekend Rally Turns to Rout

Ethereum’s weekend surge took many traders by surprise, pushing the digital asset to unprecedented levels. The rally was fueled by optimism about potential regulatory clarity and institutional adoption.

Within 24 hours, the entire crypto market cap dropped, eliminating billions of dollars in value from the digital asset ecosystem. That rally had come after Fed Chair Jerome Powell hinted at potential rate cuts, sparking a broader market rebound and renewed appetite for risk. Since then, the reversal has triggered forced liquidations of roughly $245 million in long ether positions and $175 million in long bitcoin bets over the past day, according to CoinGlass.

Ben Kurland, CEO at crypto research platform DYOR, “The buyers are finally bigger than the sellers. ETH ETFs are drawing steady inflows, and public companies are beginning to treat ETH as a treasury asset they can stake for yield — a stickier form of demand than retail speculation. Additionally, nearly a third of supply is locked in staking, scaling solutions are mature and, with rate cuts back on the table, the cost of capital is falling. Those forces turned $4,000 from a resistance level into a foundation for re-pricing ETH’s next chapter.“

Bitcoin Also Faces Severe Pressure

Bitcoin’s flash crash update shows the world’s largest cryptocurrency also suffered significant losses during the selloff. Bitcoin, which often leads market movements, fell sharply alongside Ethereum.

The decline in Bitcoin added to the broader market pressure, creating a cascading effect across smaller altcoins. Many digital assets lost double-digit percentages of their value in the space of a few hours. In January 2025, as well, the crypto market crashed when Trump returned to the Presidency.

Ethereum has taken the lead over Bitcoin in recent weeks, due to favorable regulatory signals, surging demand for stablecoins, and heavy accumulation by a wave of corporate buyers. This momentum has allowed ETH to hold above the $4,000 mark this month, a level it had repeatedly struggled to break since 2021.

Regulatory Concerns Add Pressure

Recent developments in cryptocurrency regulation have contributed to market uncertainty. The WFE has urged oversight of tokenized stocks, adding another layer of regulatory concern for investors.

The World Federation of Exchanges has called for stricter supervision of tokenized securities, potentially affecting how traditional assets are represented on blockchain networks. This regulatory scrutiny of crypto by the U.S. government has made some institutional investors more cautious while also attracting investors towards digital assets.

These regulatory discussions come at a time when many countries are developing comprehensive frameworks for digital asset oversight. The uncertainty around future regulations continues to influence market sentiment.

Price Action and Market Response

Bitcoin and Ethereum’s price reaction to recent events demonstrates the interconnected nature of major cryptocurrencies. Both assets moved in tandem during both the rally and subsequent decline.

Technical analysts point to key support levels that both cryptocurrencies are testing. Many believe these levels will determine whether the current decline continues or if markets can stabilize.

Despite the recent volatility, many analysts remain optimistic about the long-term prospects for major cryptocurrencies. The weekend’s events serve as a reminder of the market’s inherent volatility and the importance of risk management.

Institutional adoption continues to grow, providing a foundation for future growth despite short-term price swings.