Ethereum (ETH) is currently facing a tough battle to maintain its position above the $4,200 mark following a significant sell-off that led to widespread liquidations across the cryptocurrency market. The past week has seen ETH drop by almost 9%, with traders now preparing for a potential retest of the $4,100 level.
According to data from CoinGlass, more than $178 million worth of positions were liquidated in the last 24 hours, with ETH long traders experiencing the most significant losses, with over $127 million wiped out. One particular case involved a Hyperliquid trader who lost nearly $6.2 million after aggressively re-entering ETH longs, turning months of gains into substantial losses in just two days.
The current volatility in the market coincides with Ethereum’s exit queue for staking withdrawals surging to 910,461 ETH, valued at approximately $3.91 billion. This surge suggests an imminent wave of supply that could further exert pressure on prices.
Despite the challenges faced by retail traders, institutional investors have been stepping in to purchase the dip. Bitmine Immersion, the largest publicly traded ETH holder, recently acquired 52,475 ETH, increasing its holdings to nearly $6.6 billion. Similarly, SharpLink purchased 143,593 ETH at $4,648, although their position is currently in the red. Blockchain trackers have also identified new inflows from FalconX-linked wallets amounting to over $38 million, indicating that significant investors are continuing to accumulate ETH in anticipation of its long-term value.
Analysts warn of the possibility of deeper losses for Ethereum before a potential recovery. Market experts point to macroeconomic uncertainty ahead of the U.S. Federal Reserve’s Jackson Hole meeting as a potential trigger for further risk-off sentiment across both crypto and equities. On-chain activity for Ethereum has also shown signs of weakening, with a nearly 28% drop in active addresses in August and a slowdown in network growth, raising concerns about short-term demand.
Despite the current challenges, some analysts remain optimistic about Ethereum’s long-term prospects, particularly once the market absorbs the $4 billion staking unlock. Projections suggest that Ethereum could reach between $6,000-8,000 by the end of the year if institutional flows continue.
As Ethereum faces the critical question of whether it can defend the $4,000 level, traders and investors alike are closely watching to see if supply pressure will drive the cryptocurrency into a deeper correction. The future of ETH remains uncertain, but with institutional support and long-term potential, there is hope for a recovery in the coming months.