Ethereum Plunges Below $4,000 as $36M Liquidation Shakes Market Confidence
Ethereum is having a hard time around $3,900 after a week of devastating liquidations that changed the cryptocurrency's technical landscape.
Quick overview
- Ethereum is struggling around $3,900 after significant liquidations, with total losses exceeding $45 million this week.
- Despite bearish technical indicators, institutional adoption continues to rise, exemplified by SharpLink Gaming's decision to tokenize shares on Ethereum.
- Key support levels are critical for Ethereum's price direction, with analysts noting that a drop below $3,400 could lead to further declines of 10-15%.
- Long-term forecasts remain optimistic, with potential targets suggesting Ethereum could reach as high as $20,000 under favorable conditions.
Ethereum ETH/USD is having a hard time around $3,900 after a week of devastating liquidations that changed the cryptocurrency’s technical landscape. The second-largest digital asset in the world is under more and more pressure as bearish reasons threaten to push prices down even more.
Record-Breaking Liquidation Exposes Market Fragility
One trader lost a staggering $36.4 million in a liquidation, pushing total losses to be over $45.32 million after betting long on 9,152 ETH. This huge loss is a good example of the bigger destruction that is happening in the ETH markets. This week, long positions lost $718 million, while short positions only lost $79.62 million.
The uneven liquidation data shows that there was a worrisome concentration of debt that built up in the second quarter of 2025. In the last 24 hours, there were long liquidations worth more than $331.66 million. This changed the mood of the market and showed how weak holdings that are too leveraged are.
Corporate Adoption Provides Fundamental Support
Even though the technicals are gloomy, institutional adoption keeps going up. SharpLink Gaming, the second-largest public firm that owns Ether, said it would tokenize its SBET shares directly on Ethereum using Superstate’s Open Bell platform. This milestone is a big step forward for tokenizing real-world assets.
Co-CEO Joseph Chalom said that the decision shows their faith in the future direction of global financial markets. This is happening at the same time as CME futures open interest is rising, which shows that more institutions are getting involved.
ETH/USD Technical Analysis: Critical Support Zone Determines Direction
During the bad market from 2022 to 2023, the $3,800 to $4,000 zone was a strong resistance level. If the defense is successful, it might turn former resistance into support. This could start a relief rally toward $4,760–$5,000, where there are a lot of short liquidation clusters.
Kamran Azghar, an analyst, says that $3,600 is a “key demand zone” that could cause rebounds that aim for $4,900 or more. Weekly charts reveal that ETH is challenging important horizontal support again, which means that the current levels are very important for figuring out the short-term trend.
Technical Breakdown Points to Extended Selling
Ethereum’s daily chart showed a bearish breakdown from a symmetrical triangular formation, which usually means that the price will keep going down for a long time. The first goal is the 0.382 Fibonacci retracement level, which is about $3,595 and is about 10% lower than where we are now.
The important support zone between $3,600 and $3,400 is also where Ethereum’s 200-day exponential moving average is, at $3,392. This means that in the worst-case situations, the price may drop by 15%. CoinGlass liquidation heatmaps show that there are risky clusters of long positions between $2,370 and $2,500. This means that cascading liquidations could make selling pressure worse.
Macro Headwinds Complicate Recovery
Bad macroeconomic conditions make technical problems even worse. The strength of the dollar, the Federal Reserve’s caution, and rising bond yields have made people less willing to take risks around the world. Uncertainty about how MiCA will be put into effect and US crypto laws makes things more complicated, and $76 million in ETH ETF outflows are making people feel bad.
Validator exit lines and lower staking inflows have made natural purchasing pressure weaker, and Bitcoin’s growing dominance makes it even harder for the market to recover.
Ethereum Price Targets Range from Bearish to Bullish
If the current support level fails, technical analysis says there might be an extra 10–15% drop, with $3,400 being a key line of defense. But longer-term forecasts are still positive, with increased CME futures interest backing year-end goals of $6,800.
Ted Pillows, a crypto analyst, says that a bigger global M2 money supply might push ETH up to $20,000, although these are still quite speculative predictions.
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