Ethereum's Price Plummets 20% as $165M in Long Positions Liquidated
1min read Ethereum [ETH] has recently experienced a significant market correction, resulting in substantial losses for traders. Approximately $165 million in long ETH positions were liquidated as a result of this correction. This liquidation occurred as leveraged traders faced unexpected price declines, forcing many to sell their assets. The high-quality market liquidity could continue to push ETH’s price down, leading to greater price fluctuations.
These massive long position liquidations indicate that bullish sentiment has been weak, making future leveraged entries unlikely in the coming sessions. The negative market impressions might prevent ETH from reaching critical support areas, potentially fueling additional selling and extending the downtrend. Additionally, an Ethereum ICO participant, who had not been active for seven years, deposited 1,700 ETH valued at $3.18 million into Binance. This unusual movement suggests that the holder may have planned to sell their coins, adding to the sell-side pressure.
Whales, or large holders, can generate market instability by moving their assets, as market speculators try to predict their intentions. In this case, the deposited ETH could lead to real sales by investors, potentially creating unfavorable market conditions for Ethereum. However, ETH has shown minimal changes if the whales perform investment strategies with their funds instead of conducting sales activities.
At the time of writing, bearish sentiment seemed to be emanating from the Ethereum blockchain. The number of daily transactions remained around 1 million as usage steadily decreased across the board. While the transaction frequency for a month surpassed 40 million, it fell short of reaching its peak numbers. Active addresses stayed below 750,000 as user involvement seemed to be declining. However, the monthly active addresses totaled more than 10 million, indicative of sustained user engagement in the long term.
New Ethereum network addresses (7DMA) revealed declining statistics since they fell to numbers under 100,000. The 2.5 million monthly new addresses created less maximum impact than previously recorded spikes of new addresses. Ethereum’s price broke down through the April max pain point of $2,200, a level that has historically served as support, suggesting that more downside can be anticipated.
Currently, Ethereum might be functioning more as a primary utility system, especially since the data suggested user addition and transaction operations did not reflect growing trends. The appeal of Ethereum investments could fall depending on constant adoption rates remaining stagnant. The fall in network use, along with major holder sell-offs by whales and a hike in liquidations of long positions, are all signs of negative sentiment. Finally, ETH’s falling price continues to create doubts about its capability to serve as an investment asset. To put it simply, the market environment for Ethereum is unclear right now.
