Ethereum (ETH) dropped below $4,000 in early Asian trading today, reaching a nearly seven-week low. This steep decline led to significant liquidations, adversely affecting traders’ portfolios.
Additionally, in September, the second-largest cryptocurrency exhibited increased volatility, with whale activity oscillating between aggressive buying and selling.
Ethereum Price Falls Below $4,000
BeInCrypto Markets data indicated that the altcoin hit a low of $3,965—its lowest point since early August. This drop was part of a broader downtrend, pushing the asset down 12.4% over the past week.
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By midday, the price had somewhat recovered to $4,032, showing a 2.93% decline for the day.
The correction wasn’t entirely unwarranted, as analysts had previously predicted a decline below the $4,000 mark. However, it sparked significant liquidations throughout the market.
Coinglass data revealed that over the past four hours, more than $134 million in ETH long positions were liquidated, contributing to a grand total of $140 million in liquidations.
Lookonchain, a blockchain analytics firm, noted that as ETH fell below $4,000, a trader’s (0xa523) entire position of 9,152 ETH, valued at $36.4 million, was liquidated.
“His total losses now exceed $45.3 million, leaving him with less than $500,000 in his account,” the post reported.
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How Are Whales Trading Ethereum?
While retail traders faced losses, whale activity painted a more intricate picture. Market sentiment in September remained highly volatile, as whales employed varied strategies.
On the selling front, Grayscale transferred over $53.8 million in ETH to Coinbase yesterday.
“Big money isn’t buying Ethereum right now,” analyst Ted Pillows wrote.
Other whales followed suit, offloading tens of millions in ETH, including a single sale of $12.53 million. BeInCrypto’s recent analysis suggested an uptick in sales among long-term holders, countering bullish inflows.
Conversely, there were strong accumulation efforts. Lookonchain noted that 10 wallets withdrew 210,452 ETH—worth $862.85 million—from platforms such as Kraken, Galaxy Digital OTC, BitGo, and FalconX. Another whale withdrew 22,100 ETH valued at about $91.6 million from Kraken.
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Regardless, an analyst remarked that the contrasting patterns indicate whales are gearing up for substantial market movements, either upward or downward. The analyst pointed out that Binance, the largest exchange for Ethereum transactions, mirrored this mixed sentiment.
Some days recorded withdrawals exceeding 8 million ETH, while other days saw deposits of up to 4 million ETH, suggesting possible selling. This constant fluctuation highlighted the opposing strategies of market participants.
Yet, a considerable amount of Ethereum on Binance remained untouched, with utilization rates close to zero. This suggests that while large holders—or whales—were transferring funds, they were primarily biding their time on the sidelines.
“The market appears to have been preparing for a major move but has yet to trigger it. This type of behavior often precedes: An explosion in volume or a major price shift, either upward or downward. Continued low utilization despite rising deposits could indicate accumulation rather than selling pressure. A subsequent surge in utilization would signal an actual market entry, potentially pushing the price upward or triggering a sharp correction,” the analyst added.
What’s Next For Ethereum?
So, what could be the next move? Most analysts concur that ETH faces additional downside risks. One analyst compared ETH’s current performance to June, suggesting the price could drop to $3,750 before rebounding to $7,000.
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“Ethereum is literally forming the same false breakdown we saw in late June, right before the 100% rally from $2,000 to $4,000. Now, don’t act like you haven’t seen this before,” another analyst stated.
Additionally, Benjamin Cowen, CEO of Into The Cryptoverse, mentioned that Bitcoin is expected to regain market strength, with its dominance likely surpassing 60%. This would imply a shift of capital back into Bitcoin, disadvantaging altcoins.
“ETH should eventually hit new highs again, but liquidity should flow back to BTC for now,” Cowen remarked.
Moreover, Shawn Young, Chief Analyst of MEXC Research, emphasized that if ETH loses the $4,000 support, it could fall to $3,800, though the overall outlook remains positive.
“ETH faces a similar fate, with downside risks to $3,800 if the critical $4,000 support fails, yet the medium-term structure stays constructive if buying activity resumes with strong buy-side volume,” Young told BeInCrypto.
Ethereum’s recent plunge below $4,000 highlights the struggle between sellers securing profits and whales quietly accumulating. With rising liquidations and mixed sentiment, ETH’s upcoming decisive move may depend on whether buyers can maintain the $4,000 level—or if bears push for another decline before the market regains momentum.
