Behold, the crypto world’s latest spectacle: Ethereum’s $470 million liquidation, which, while superficially reminiscent of August’s chaos, is less a repeat performance and more a poorly rehearsed farce. A curious case of deja vu with a side of existential dread.
The data, that most reliable of oracles, suggests that last August’s purge was a mere reset of leverage in a buyer-dominated utopia, while this week’s crash is a full-blown coup by the sellers, who have taken to the streets with torches and short positions.
Ethereum Flashback? Not Quite
Over the past two months, Ethereum has endured only two major long liquidations exceeding $400 million. One might say the market has been as volatile as a toddler with a pocket full of glitter.
On August 14, Ethereum’s $444 million in long liquidations occurred amid a buyer-dominated environment, where open interest stood at a lofty $29 billion and funding rates hummed at a cheerful +0.013. A veritable feast of longs, if you will, until the price dropped and triggered a cascade of overextended positions. Yet, the uptrend remained as stubborn as a mule in a hailstorm.
During that period, the price closed above the EMA 20, SMA 50, and AVWAP levels, a triumphant parade of buyers asserting control. A far cry from the current scenario, where the market has descended into a seller’s paradise.
Fast forward to September 22, when long liquidations reached $467 million, and the setup was notably different. Open interest had dwindled to $27.3 billion, while funding rates slipped slightly negative to -0.0020. A chilling reminder that bears now hold the reins, and the bulls are busy reapplying their lipstick.
Though funding had been positive in the days leading up to the sell-off, the sudden flip signaled a shift in power, as if the market had traded its monocle for a pitchfork. Technically, Ethereum failed to defend key support around the 5° mark, as the price closed below the EMA 20, SMA 50, and the once-sacred AVWAPs that served as a safety net for buyers. A tragic fall, if ever there was one.
CryptoQuant, that paragon of insight, declared this breakdown a clear indication that sellers had seized control, transforming a routine shakeout into a deeper structural shift. One might say the market is now a ship without a rudder, adrift in a sea of uncertainty.
A $400 million liquidation in a bull-leaning market merely resets leverage, while the same magnitude in a seller-driven context can accelerate downside momentum. A lesson in the perils of overconfidence, perhaps?
Bearish Forecasts
Ethereum remains in a fragile zone, teetering on the edge of a precipice. The asset briefly slipped below $4,000 on Thursday before recovering slightly above the level, a fleeting victory for the optimists. Analysts, including the enigmatic ‘Sykodelic,’ now anticipate a correction that could push prices toward $3,500, with intermediate supports at $3,800-$3,900. A dance of despair and delusion, if ever there was one.
On-chain figures, however, reveal significant whale accumulation and shrinking exchange holdings, suggesting that larger investors are capitalizing on weakness. A shaky near-term outlook, indeed-a market as fickle as a politician’s promise.
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2025-09-25 19:00