Ethereum declined nearly 2% as rising geopolitical tensions between the United States and Iran weakened investor confidence and pushed traders away from riskier assets. Despite the latest pullback, technical indicators suggest the cryptocurrency could attempt a short-term recovery.
Ether fell 1.94% to close at $1,765 after renewed conflict in the Middle East unsettled global financial markets. The decline followed reports of increased military tensions between Washington and Tehran, alongside disputes surrounding the Strait of Hormuz, one of the world’s most important energy shipping routes.
According to Reuters, US President Donald Trump said the United States was reinstating its blockade of Iranian shipping in the Gulf, stating on Truth Social that the Strait of Hormuz “is open and will remain open with or without Iran.” Iranian Foreign Minister Abbas Araqchi responded by saying Tehran had long safeguarded the strategic waterway and would continue to do so.
The heightened uncertainty has reduced demand for higher-risk assets, including cryptocurrencies, as investors shift toward safer investments during periods of geopolitical instability.
Technical outlook
From a technical standpoint, Ethereum remains under pressure, trading below both its 100-day and 200-day simple moving averages, reinforcing the broader bearish trend that has persisted for several months.
However, momentum indicators are showing early signs of improvement. A bullish divergence on the Moving Average Convergence Divergence (MACD) indicator suggests selling pressure may be easing, while the Relative Strength Index (RSI) is moving higher from oversold territory, indicating buying interest could gradually return.
On the upside, Ethereum faces immediate psychological resistance near the $2,000 level, with stronger resistance around $2,380. A sustained move above these levels would strengthen the case for a broader recovery.
On the downside, key support remains at $1,500. If that level fails, analysts see the next major support near $1,000, where additional selling pressure could emerge.
While technical signals point to the possibility of a near-term rebound, Ethereum’s direction is expected to remain closely tied to developments in the Middle East and broader market sentiment.
