Ethereum Price Analysis: Here’s Why ETH Stalled as TRUMP Token Rally drives BTC to $105K

Ethereum price tumbled 8% in 48-hours to hit $3,130 on Sunday, despite bullish sentiment dominating the crypto sector ahead of Donald Trump’s inauguration. While the likes of Bitcoin and Solana hit record highs, ETH market momentum has been considerably subdued.

Ethereum (ETH) decouples from Market Rally as Trump Token Sparks Volatility

Ethereum (ETH) paints a bleak picture as latest moves by U.S. President Donald Trump intensified volatility across the global crypto markets. On January 18, Trump announced the launch of the $TRUMP token, a memecoin hosted on the Solana network.

The $TRUMP token has seen remarkable success, starkly contrasting the President’s more publicized but controversial World Liberty Financial (WLFI) project, which faced heavy criticism and ultimately failed to gain traction.

The $TRUMP token has amassed a market cap exceeding $7.4 billion, with trading volume surging to $14.8 billion as of Sunday, January 19.

The memecoin’s rapid ascent has shaken the crypto market, surpassing the combined 24-hour trading volumes of Shiba Inu (SHIB) and Dogecoin (DOGE), making it the most-traded memecoin within 24 hours of its launch.

Crucially, the $TRUMP token rally has coincided with an unexpected downturn in Ethereum price performance.

ETH price has plunged 8% since the memecoin’s launch, dropping from $3,494 on Saturday to a weekly low of $3,130 as of January 19, as depicted in the TradingView chart above.

This sharp decline raises concerns among Ethereum’s community and market speculators about the broader implications of Trump’s crypto moves on Ethereum’s market dominance.

Ethereum Foundation’s Persistent Sell-offs dampening ETH momentum

Donald Trump’s choice of Solana as the host network for his memecoin has further tipped the scales against Ethereum in the Layer-1 smart contract network battle. Within 24 hours of Trump’s token launch, Solana’s price skyrocketed to a new all-time high of $275, while Ethereum endured a sharp 8% decline.

This suggests that many Ethereum investors have divested from ETH in favor of Solana, Bitcoin, and other tokens perceived to offer more immediate profit opportunities ahead of Trump’s inauguration.

A key factor dampening Ethereum’s short-term profitability is the persistent sell-off by the Ethereum Foundation, the core team of developers responsible for the network’s operation.

The Arkham Intelligence chart above reveals that the Ethereum Foundation has sold over 400 ETH in multiple tranches since January 7. As of press time, the Foundation’s ETH balances have dropped below 270,000 ETH.

When key insiders engage in consistent sell-offs, as observed in the ETH markets over the past weeks, it dampens bullish momentum. This behavior discourages new investors from buying-in and often prompts short-term holders to exit ETH for better-performing assets.

In summary, Solana’s rising market share, fueled by Trump’s token launch, coupled with the Ethereum Foundation’s recent sell-offs, has contributed to ETH’s price decline over the past 24 hour

Ethereum Price Forecast: $3,100 Support at Risk

Ethereum price forecast chart displays a consolidation phase, having declined as low as $3,130 within the daily time frame before rebounding 1.8% to reclaim the $3,300 territory.

The recent price volatility alligns with increased market activity ahead of Donald Trump’s inauguration, suggesting heightened speculative trading.

However, Ethereum faces critical resistance at $3,529.98, as highlighted by the Parabolic SAR (blue dots), indicating the trend remains bearish below this level.

The Donchian Channels (blue bands) define the $2,920 lower boundary as robust support. A break below this level could signal a prolonged downturn toward $2,800.

Conversely, the midline of the Donchian Channels at $3,332.42 now acts as a pivotal level for bullish momentum.Volume trends show muted buying enthusiasm compared to earlier in the year.

The declining Bull-Bear Power (BBP) readings also highlight bearish pressure. Still, should bulls reclaim the $3,529.98 resistance, Ethereum could challenge the $3,744.83 upper boundary, confirming a shift in market sentiment.

The mildly bearish narrative dominates unless buyers push Ethereum above key resistance levels. A failure to hold $3,100 support would expose Ethereum to deeper downside risks.