Ethereum Plummets 9%: Massive 25x Leveraged Liquidations Sparked by Middle East Tensions
The cryptocurrency market got hit with a brutal "risk-off" wave this past week as the Middle East crisis got a whole lot worse...
Quick overview
- The cryptocurrency market faced significant volatility due to escalating tensions in the Middle East, leading to a near-9% drop in Ethereum's value in a single day.
- High-leveraged traders, including the notable 'legendary whale' Machi Big Brother, suffered massive losses, with his account liquidated for $29 million.
- Ethereum is currently struggling to maintain support around $1,840, with technical indicators suggesting a bearish trend and potential further declines.
- Traders are advised to adopt a cautious approach, waiting for clear signals before making moves, particularly if Ethereum breaks below key support levels.
The cryptocurrency market got hit with a brutal “risk-off” wave this past week as the Middle East crisis got a whole lot worse. Ethereum (ETH), the world’s second biggest digital asset, took a near-9% hit in a single day, driven by reports of a US-Israeli-Iran missile war.
And this sudden volatility wasn’t just a problem for investors who simply held onto their Ethereum – it triggered a nasty “long squeeze” that wiped out a bunch of high-leveraged traders. The big loser was Machi Big Brother – a so-called “legendary whale” known for extremely aggressive bets on Ethereum. His 25x leveraged stakes evaporated in a series of liquidations that destroyed a cool $29 million in just minutes.
The Geopolitical Powder Keg: More Military Strikes and Standoffs
Market emotions took a nosedive following the news of a new round of missile strikes targeting Iran. Escalation of this kind has put all hopes of a diplomatic solution to Iran’s nuclear program on hold, sending investors running for the hills towards “safe-haven” assets like gold and silver while ditching “risk-on” assets like crypto.
The uncertainty level went through the roof after US President Donald Trump described the operations as a significant combat phase. And with reports that Iran’s Supreme Leader had been moved to a secure location, things just got a whole lot worse for Ethereum – sending it plummeting below psychological support levels that had held firm for weeks.
Ethereum By The Numbers: A Crappy Month So Far
While ETH did tease a minor recovery up to the $2,000 mark, the latest crisis has, once again, reset the clock. The intraday loss is just part of a broader, more worrying trend for the asset:
- -9%: The day’s intraday drop following the strike reports.
- -6%: Total loss over the past 7 days.
- -37%: Total drawdown over the last 30 days.
As we write this, Ethereum is fighting to stay above $1,859. For pro traders this confirms that macroeconomic forces are currently way stronger than the network fundamentals like things like the upcoming “Fusaka” upgrade or institutional ETF money coming in.
The 25x Disaster: How Machi Big Brother Lost Everything
The most shocking part of this crash is the total liquidation of the account of “legendary whale” Jeffrey Huang (aka Machi Big Brother). For those who’ve forgotten – Machi was the man who liked to play high-stakes with Ethereum, but this time round, his conviction in a recovery turned out to be his downfall.
- The First Knock-Out Blow: His initial high-leveraged positions got hit when Ethereum dipped, leaving him with a laughable $91,000 in his account.
- The “Going for Broke” Re-entry: In an attempt to recover, he put in a fresh 25x long position for around 925 Ethereum – exposure worth a massive $1.78 million.
- The Final Nail: with the liquidation price set at $1,866, all the market had to do was slip slightly lower to trigger a total loss. And then – boom! His account was reduced to a mere $13,000.
This little episode makes for a great case study in the dangers of excessive leverage. When you’re at 25x, all it takes is a 4% move against your position to wipe you out completely.
Ethereum Technical Forecast: Can ETH Hold $1,840?
As we speak, Ethereum is hovering in a critical “demand zone” between $1,840 and $1,850. This area is where the long-term rising trend line is – and it’s a critical structural floor. However, the technical indicators show that the bulls are feeling pretty exhausted.
- Ceiling and Floor: The 50-period MA at $1,988 is now a major overhead ceiling – above that is the 200-period MA near $2,150, and that just means the long-term trend is firmly bearish.
- RSI Check: And when you look at the Relative Strength Index (RSI), it’s down in the low 40s – which shows fading momentum – but it’s not “oversold” enough to guarantee a bounce just yet.
The Bottom Line: If Ethereum can’t hold $1,840 on a 4-hour close, the “trapdoor” opens to $1,680 or even $1,518. But if it managed to go back above $1,988, that could trigger a short-squeeze towards $2,146.
Strategy for Traders
For those looking to navigate this volatility, the current play is to just “wait and see”. If Ethereum breaks below $1,840 support, that’s a clear short-selling opportunity with a target of $1,680. But any entry should come with a stop-loss above $1,988 to avoid getting caught up in some sudden relief rally.
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