Ethereum (ETH) experienced a significant downturn, briefly dropping below the $4,000 mark for the first time since early August. This price decline triggered a wave of liquidations, with one "whale" trader reportedly losing $36.4 million on a leveraged long position of 9,152 ETH. Overall, the event spurred liquidations of over $415 million in the crypto market in the past 24 hours.

Market Overview

As of September 25, 2025, Ethereum was trading around $3,963, reflecting a roughly 4% decrease from the previous day. Over the past week, the asset has fallen by 10.40%. Ethereum's market capitalization is approximately $478.36 billion, with a 24-hour trading volume of $35.03 billion.

Liquidation Details

The most prominent liquidation involved a whale address (0xa523) that lost over $45 million after their leveraged long position was wiped out. The trader's initial position was valued at over $36 million but was completely liquidated as ETH fell below $4,000, leaving the account with less than $500,000. Data from Coinglass indicates that $100 million in Ethereum long positions were liquidated within a single hour.

Factors Contributing to the Price Drop

Several factors contributed to Ethereum's price decline:

• ETF Outflows: U.S. spot Ethereum ETFs recorded net outflows of $79.4 million on September 24, marking the third consecutive day of withdrawals. Fidelity's FETH and BlackRock's ETHA led the redemptions. Net outflows from ETH ETFs totaled $217 million this week, signaling institutional investors pulling back.
• Macroeconomic Headwinds: Uncertainty surrounding a potential U.S. government shutdown and cautious signals from the Federal Reserve also weighed on the cryptocurrency market.
• Technical Factors: Ethereum broke below key support levels, increasing selling pressure. The break below the Bollinger Bands' midline at $4,408 put the lower band around $3,750 in focus.
• Leverage: The high levels of leverage used in crypto trading amplified both gains and losses, contributing to larger price swings.
• Market Dominance Decline: Ethereum's market dominance has declined from 14.6% to 12.8%, indicating a loss of relative relevance.

Technical Analysis and Potential Support Levels

From a technical analysis standpoint, Ethereum's structure has turned cautious. The $3,900-$4,000 zone is seen as a strong confluence zone supported by a horizontal demand zone, the 100-day moving average, and the lower boundary of an ascending channel. Key support levels to watch include $3,850 and $3,750. A failure to hold above $4,000 could trigger a move towards $3,850. To resume a bullish trajectory, Ethereum would need to recover the $4,250–$4,400 region.

Whale Activity

While some whales faced liquidation, others used the dip as an opportunity to accumulate more ETH. One report indicated that 10 wallets accumulated $862 million in ETH, while others sold $12.5 million amidst the volatility.

Market Sentiment

The decline has led to a shift in market tone, with traders closely monitoring key support zones. The long/short ratio has slipped to 0.95, indicating that more traders are betting against ETH's recovery in the near term. The incident has sparked debate within the crypto community, with some analysts viewing it as a "bear trap," while others question the safety of decentralized finance.