Ethereum (ETH) witnessed a drastic drop early today, a decline that saw the asset drop below $4k, a move that caused a flood of selloffs across the market. The decline triggered liquidations of $329 million in leveraged long positions over the past 24 hours, following ETH’s failed attempts to hold on to the $4,000 support level.
Ethereum’s relative stability in September momentum broke early this week with multiple selloffs noticed recently. According to data shared today by Merlijn the trader, the asset’s price falling below $4,000 led to the massive wipeout of $329 million in long positions across the market.
Drivers of Ether Liquidations
Today, the digital asset dropped below the $4k support level, causing fear among investors about how low ETH’s value could go in the short term. Multiple catalysts, including macroeconomic turbulence, slowdown in ETF inflows, and reduced trading activity, are the key contributors to the recent decline.
According to data tracked today by Lookonchain, whale Oxa523 lost over $45 million in a leveraged long position following the liquidation of their 9,152 ETH when Ethereum fell below $4k. This indicates how leveraged trading can be risky during volatile markets. Besides that, ETH ETF inflows have experienced decreased inflows in September. Until now this month, Ethereum spot ETFs have cumulatively amassed just $110 million in net inflows compared to August’s inflows of over $3.8 billion.
Another contributor to the recent Ether market sell-off is the weakened institutional demand for the asset. Early today, digital asset manager Grayscale sold massive ETH tokens worth $53,810,000 on Coinbase. The trade signalled that institutions are not purchasing Ether at present. Market dynamics show decreased trading volumes on the Ethereum market, signifying persistent sell-side pressure amid wider altcoin excitement. This implies that investors have been consistently selling Ethereum more than purchasing.
ETH’s Price Outlook
Ethereum’s recent failure to hold above $4,108 and $4,048 support levels influenced sell motivation among traders who moved to withdraw gains and limit downturn pressure.
As a result, the sell-off triggered liquidations mostly on long positions, intensifying the price drop. Currently, the asset’s price stands at $4,005, down 4.0%, 12.3%, and 9.1% over the past 24 hours, week, and month, respectively.
