- Ethereum dropped to $4,173, wiping out $495 million in trader positions within just 24 hours.
- Whale movements to exchanges and a rise in trading volume reflect strong sell-side pressure in the market.
- Despite bearish momentum, upcoming upgrades and institutional inflows could provide support for Ethereum’s recovery.
ETH has endured a sharp reversal as its price fell below $4,200, bringing a heavy round of liquidations that rattled market confidence. The second-largest cryptocurrency dropped 6.8% in the past 24 hours, settling at $4,173 during early Friday trading. With a seven-day range stretching from $4,206 to $4,659, ETH is now down 10% on the week and 12% across the past month. The severity of this pullback was underscored by liquidation data, where nearly $495 million worth of Ethereum positions vanished, with long traders shouldering $478 million of the pain.
This steep correction coincided with surging market activity. Trading volume for ETH soared 124% to $32.5 billion in one day, while derivatives trading jumped 183% to $93.8 billion. The numbers reflect an environment of rapid position exits rather than new market entrants, as open interest fell 5.2% to $60.2 billion. On-chain analytics added another layer of caution, with large holders shifting coins to exchanges, a move often associated with heavier selling pressure from whales.
Investor Sentiment Sours as Ethereum Struggles Under September Seasonality and Technical Weakness
Market sentiment is bearish at the moment, with the Crypto Fear & Greed Index falling to the level of 46, meaning the “fear” state is winning on the traders mentality. Historically, September is the weakest month in cryptocurrency performance, and at the moment, Ethereum seems to be repeating those patterns. Adding to the Ethereum woes, Ethereum fell below its 20-day moving average, adding to the short-term bearish sentiment. Both the Momentum and MACD indicators show selling pressure; the RSI is at the 40 level, implying that the price is weak but not yet in oversold territory.
Bollinger Bands are indicating that Ethereum is currently testing the bottom band at about $4,160. Immediate support is at $4,150, and if broken, would likely send these prices close to the $3,800 mark. On the other hand, Ethereum is still obliged to reclaim the $4,400 level to sustain any footing, with the more optimistic scenario requiring a level above $4,500, which would probably allow the price to overshoot $4,700.
Even with the addition of macro factors earlier this month that benefited the economy, such as the Federal’s 0.25% cut in interest rates, the macro data pullbacks in obtuse short seem surprising. That inch along the ETH almost went up to $4,700, and within that increment, pullbacks along with the broader risk aversion gained, and irrespective of profit-taking, the wider publicly obtainable benefits vanished. Analysts note that the sell-offs signal a similar pattern of volatility instead of a long-term structural breakdown in ETH’s growth.
Long-term Optimism Remains with the Fusaka Upgrade and Institutional Inflows Supporting ETH’s Future
Despite immediate headwinds, ETH continues to benefit from structural developments that could drive renewed strength later in the year. Core developers have scheduled the Fusaka upgrade for December 3, with testnet rollouts beginning in October. This upgrade, one of Ethereum’s most significant technical milestones, aims to improve network performance and expand institutional-grade use cases. If testnet rehearsals proceed smoothly, the deployment on the mainnet in December could act as a strong catalyst for renewed confidence.
Institutional activity is also picking up, underscoring that capital inflows remain intact even amid short-term volatility. Data from CoinShares revealed that digital asset investment funds saw $3.3 billion in inflows last week, their strongest since mid-summer. Ethereum itself recorded $646 million in inflows, reversing a string of earlier outflows, while Solana attracted $198 million, including a record-setting $145 million in a single day. These numbers indicate that institutional players continue to treat Ethereum as a core holding despite its recent slump.
