Ethereum (ETH) extended its steep decline this week, falling more than 20% in just two days and triggering nearly $1 billion in liquidations across leveraged derivatives markets. The sudden correction has left traders reeling and analysts warning of further losses ahead, with ETH possibly heading toward the $2,700–$2,800 range if selling pressure persists.
Ethereum Suffers Steep Two-Day Decline
After trading close to $4,000 on Monday, Ethereum fell sharply to around $3,000 by late Tuesday afternoon — its lowest level since mid-July. The two-day drop rivals the October 10 flash crash, when ETH plunged 25% in less than 24 hours, wiping out months of gains.
Market data from CoinDesk shows ETH was last seen hovering near $3,200 after a brief rebound, still down nearly 10% in the past 24 hours. The sharp correction underscores mounting weakness in the broader crypto market, with risk sentiment deteriorating as Bitcoin also faces renewed selling pressure.
$1 Billion in Liquidations as Leverage Unwinds
According to CoinGlass data, over $970 million in leveraged Ethereum positions were liquidated over the past 48 hours. Most of these were long positions — traders betting on higher prices — that were wiped out as ETH broke through key support zones one after another.
Analysts say the magnitude of these liquidations reflects excessive leverage in the market, where traders had become overly optimistic following Ethereum’s summer rally toward $5,000. As ETH lost momentum, cascading liquidations amplified the decline, pushing prices lower in a self-reinforcing loop.
Institutional Buyers Step Back
Markus Thielen, head of research at 10x Research, said in a Tuesday note that Ethereum’s breakdown has exposed a lack of institutional support at current levels. He highlighted that BitMine, one of the largest corporate holders of ETH, appears to have exhausted its buying capacity after accumulating around 3.4 million ETH in recent months.
Thielen estimates BitMine’s average purchase price at roughly $3,900 per token, putting the firm’s unrealized losses near $2 billion. While there is no immediate liquidation risk for the firm, the bigger concern is the absence of new institutional buyers who could absorb the ongoing sell pressure.
“The real question is: who will step in as the next major buyer of ETH now that BitMine has seemingly used up its firepower?” Thielen noted.
ETF Demand and Retail Interest Collapse
Another factor driving the decline is the sharp drop in Ethereum ETF inflows. During July and August, institutional investors poured nearly $9.5 billion into ETH-focused exchange-traded funds as optimism grew around Ethereum’s expanding use in decentralized finance (DeFi) and tokenized assets.
However, since the October crash, inflows have all but dried up. Thielen noted that only $850 million has exited ETH ETFs since mid-October — suggesting there may be more selling ahead, especially as many holders are now sitting on losses at current price levels.
Retail interest has also faded dramatically. Google search data shows global interest in Ethereum has dropped to just 13% of its peak, signaling weaker participation from small investors and traders who previously fueled market rallies.
Analyst Outlook: More Downside Possible
With most of the bullish catalysts from earlier in the year now gone — including ETF optimism, treasury accumulation, and DeFi momentum — analysts believe the current correction could deepen. Thielen predicts Ethereum may find its next significant support between $2,700 and $2,800, a range that previously served as a key accumulation zone.
Technical indicators also confirm a bearish bias. ETH remains below its 200-day moving average, while momentum oscillators like the Relative Strength Index (RSI) show prolonged weakness. Unless ETH can reclaim the $3,400–$3,500 zone, sentiment is expected to remain negative.
Market Sentiment Turns Defensive
The latest downturn comes as macroeconomic uncertainty weighs on risk assets, including cryptocurrencies. Rising U.S. Treasury yields and fading hopes for near-term interest rate cuts have triggered broader risk aversion, spilling over into digital assets.
For now, traders are eyeing whether Ethereum can stabilize above the $3,000 threshold. A sustained recovery above $3,300 could help limit further downside, but failure to hold current levels might open the door for a retest of the $2,800 support area.
Until institutional demand returns and leverage resets, analysts caution that Ethereum may continue to trade defensively alongside the broader crypto market.
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