Ethereum Capitulates Below $3.1k to Retest Critical Support for Bull Rally as Traders Bet on Further Selloff
Ethereum (ETH) has experienced a significant drop in price this week, marking its worst performance since April 2025. The price of the popular altcoin plummeted over 11% on Tuesday, hitting a daily low of around $3,060 before bouncing back to trade at approximately $3,206 at the time of writing.
This downward trend in Ethereum’s price also had a ripple effect on the broader altcoin market, leading to substantial losses across the board. In fact, the leveraged crypto market saw approximately $2 billion wiped out, with long traders bearing the brunt of the losses amounting to over $1.63 billion.
Why is the Ethereum Price Down Today?
Macro fears amplified by Bitcoin breakdown
The cryptocurrency market saw significant losses on Tuesday, driven by macroeconomic concerns. The U.S. stock market witnessed a valuation decline of over $700 billion on the same day, while the overall crypto market lost more than $300 billion.
As Bitcoin’s price dipped below $100k for the first time since June, Ethereum followed suit in tandem. However, the market quickly rebounded, with a buy-the-dip narrative helping to fuel the recovery.
Heavy liquidation of long traders: fueling long squeeze
The drop in the ETH/USD pair on Tuesday can largely be attributed to the heavy liquidation of long traders. According to data from CoinGlass, over $655 million was liquidated from the leveraged ETH market, with long traders accounting for more than $576 million of those losses.
This led to an exaggerated impact of a long squeeze, resulting in the notable sell-off of Ethereum on Tuesday.
What’s Next?
Following the significant price drop in Ethereum, traders on Kalshi believe that there is an 82% probability of the ETH price falling below $3k in 2025. However, market analyst Danny Marques remains optimistic, predicting a bullish rebound for the ETH/USD pair towards a new all-time high in the coming weeks.
In conclusion, while Ethereum may be facing some short-term challenges, there is still optimism for a potential recovery and growth in the near future. As always, it’s essential for investors to conduct their own research and make informed decisions when navigating the volatile cryptocurrency market.
