Ethereum (ETH) has been making headlines recently as it soared to a new all-time high above $4,900 before experiencing a slight correction. Currently, the asset is trading at $4,520, marking an 8.9% pullback from its peak but still showing a 7.6% increase over the past week.
This surge in price follows a period of strong upward momentum that has brought ETH to levels not seen since the 2021 bull cycle. Despite the overall bullish trend, analysts are closely studying short-term patterns to make sense of the market’s current volatility.
One interesting perspective comes from XWIN Research Japan, a contributor to CryptoQuant’s QuickTake platform, which has highlighted how recurring liquidation cycles are influencing Ethereum’s price action, especially at the start of each week.
According to their analysis, Ethereum’s leveraged markets exhibit a consistent rhythm tied to liquidation events. Leveraged long positions, which bet on the price continuing to rise, have often been caught off guard by sudden reversals, leading to liquidations that amplify downward movements.
During certain periods, such as April and June 2025, ETH saw a significant spike in long liquidations, surpassing 300,000 ETH in a single day as sharp downturns triggered a cascade of sell-offs. XWIN Research Japan identified a notable weekly pattern, with Mondays consistently seeing the highest liquidation volumes, followed by Sundays and Fridays.
In contrast, Saturdays tend to record the lowest liquidation volumes, likely due to reduced market activity. This cycle, known as the “Monday Trap,” suggests that traders holding leveraged positions over the weekend are particularly vulnerable once institutional and retail flows re-enter the market early in the week.
For long-term investors, understanding the risks associated with excessive leverage in a highly liquid market is crucial, regardless of the price direction.
From a technical standpoint, Ethereum’s price correction is being closely monitored by analysts. Crypto Patel, a market analyst, has pointed out that ETH has retraced from $4,957 to $4,400, with $3,900-$4,000 identified as a strong support zone. Patel suggests that holding this level could pave the way for higher price ranges of $6,000-$8,000. However, a breakdown of support could lead to downside levels of $3,500 or even $3,200.
The interplay between leveraged liquidations and key technical support levels is likely to shape Ethereum’s trajectory in the coming months. Historical data indicates that large outflows from exchanges often precede sustained rallies, while inflows typically signal selling pressure.
Recent exchange netflow data for ETH has shown a trend towards outflows, indicating that investors are withdrawing coins into self-custody, a behavior associated with long-term confidence. Institutional demand for Ethereum is also on the rise, fueled by discussions about staking integration in regulated financial products like ETFs.
Overall, Ethereum’s price movements are being closely watched by investors and analysts alike, with a keen eye on both short-term patterns and long-term trends. The market’s current volatility presents opportunities and risks that traders and investors need to navigate carefully to capitalize on the potential upside while managing downside risks effectively.