Amid an escalating trade conflict between the United States and China, Ethereum has navigated a volatile landscape, showcasing both vulnerability and resilience as global events ripple through digital asset markets. The latest flashpoint—China’s announcement of new export controls on rare earth materials in early October, quickly followed by US President Trump’s tariffs threat—sparked deep market shocks, sending Ethereum and the broader crypto ecosystem into a period of rapid re-evaluation.
Technical analysis of Ethereum’s 30-minute price chart reveals a decisive shift in momentum. The initial uptrend early in October was supported by closes above the EMA 96, SMA 240, and anchored volume-weighted average price (AVWAP), revealing robust bullish control. However, as traders digested incoming news of rare earth restrictions and followed Trump’s subsequent tariff posts, Ethereum reversed course. Former support levels became resistance, and sellers gained the upper hand as the token retreated through critical price structures.
Sentiment reached a low when China formalized its export restrictions, impacting everything from semiconductors to crypto sentiment. Traders responded to geopolitical tension by reducing exposure—open interest in Ethereum derivatives, which peaked at $33 billion in August, plummeted towards $18 billion as market participants rushed to de-risk, marking a temporary cooling phase for both spot and derivatives markets.
Despite the abrupt turmoil, signals of stabilization began to appear as diplomatic overtures suggested a possible de-escalation in the conflict. Ethereum’s price recovered above crucial moving averages and AVWAP levels, confirming renewed buyer strength and recapturing much of the ground lost during the selloff. The derivatives market, though subject to aggressive liquidation, demonstrated adaptability; funding rates returned to neutral levels, and options-market put-to-call ratios showed no extreme shifts in bearish sentiment.
This episode underscores Ethereum’s status as a bellwether for digital assets, with institutional inflows and fundamental demand helping it outperform other major altcoins during periods of stress. As global supply chains and investor psychology adjust to unfolding trade tensions, Ethereum’s ability to recover quickly from shock events signals its growing maturity and central role in both crypto finance and fintech innovation.
Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Investors should always conduct their own thorough research and consult with a qualified financial advisor before making any investment decisions in cryptocurrencies, which are highly volatile and speculative assets.
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