Ethereum (ETH) has retested the key $2,800 support level for the second time this week, as the broader cryptocurrency market erased all its gains from earlier in the week. This has led some market watchers to comment on whether investors should be concerned about the leading altcoin’s performance.
On Thursday, global markets saw a sharp downturn, with stocks, cryptocurrencies, and even precious metals losing over $3 trillion in market value within hours. Ethereum, the second-largest cryptocurrency, followed this market-wide correction, falling 6.9% on the day. The asset has been trading between $2,800 and $3,300 since the start of the year and had attempted to climb toward the higher end of that range this month. However, recent geopolitical tensions and macroeconomic uncertainty have dampened risk appetite, halting the crypto market’s early January momentum.
According to Binance data, Ethereum dipped below $2,800 on Thursday morning, briefly rebounded, and then hit a one-month low of $2,773. Meanwhile, Bitcoin (BTC) fell sharply by 6.2%, reaching a two-month low of $83,934.
Data from CoinGlass shows that crypto liquidations over the past 24 hours surged to nearly $1 billion, with $917.17 million in leveraged positions forcibly closed. During this period, 223,915 traders were liquidated. The largest single liquidation order occurred on Hyperliquid, valued at $31.64 million. Notably, more than half of these liquidations happened in just the past four hours, wiping out over $620 million since the morning. Around $422 million came from Bitcoin positions, while $160 million came from Ethereum positions.
Amid the market correction, several analysts shared their views on Ethereum’s price action. Sjuul from AltCryptoGems pointed to the daily chart, noting that Ethereum has been trading within a range for the past two months. According to the analyst, there is no clear trend as Ethereum continues to move in its “seemingly endless range” between $2,600 and $3,350. He suggested that investors should wait for a decisive breakout above the upper boundary or a breakdown below the range lows before drawing conclusions.
Similarly, trader EliZ noted that Ethereum’s macro perspective shows neither clear strength nor weakness, but rather “an enormous, forced equilibrium” on longer timeframes. He observed that ETH “continues to move within well-defined boxes, above and below the same levels for months or years, without ever establishing a structural direction.”
Based on this, the trader argued that without a confirmed breakout or breakdown from its key range, short-term price movements do not signal a “change of regime,” but merely “liquidity rotation.”
“We are not in a bullish phase, nor are we in a bearish phase. We are in a macro stalemate, where the market decides not to decide. Until we see a clean and sustained breakout of the indicated boxes… or a clear loss of the same… any strong narrative is just storytelling,” he concluded.
As of this writing, Ethereum is trading at $2,798, down 5.3% over the past week.
Frequently Asked Questions
Frequently Asked Questions Ethereums Price Drop Market Liquidations
BeginnerLevel Questions
1 What happened Why is Ethereum below 2800
Ethereum like many other cryptocurrencies experienced a sharp price drop due to a wave of selling pressure across the entire crypto market This was triggered by a combination of factors including negative broader market sentiment concerns about potential interest rate changes and the forced closure of leveraged trading positions
2 What are liquidations and why did nearly 1 billion happen
Liquidations occur when traders who borrow money to amplify their bets get automatically sold out by the exchange because their position has lost too much value When prices fall quickly it triggers a cascade of these automatic sales which pushes the price down even further creating a domino effect The 1 billion figure represents the total value of these forced trades across the market
3 Is this a crash Should I panic
While a significant drop this is a common occurrence in the volatile crypto market Its not necessarily a fullblown crash but a major correction Panic selling often worsens these situations Its a reminder of the markets highrisk highreward nature
4 Im new to crypto Does this mean I should avoid investing
Not necessarily but its a critical lesson Crypto is extremely volatile This event highlights why you should only invest money you can afford to lose avoid using high leverage and focus on longterm strategies rather than trying to time the market
5 Will the price go back up
No one can predict shortterm price movements with certainty Historically crypto markets have experienced cycles of sharp declines and recoveries The longterm trajectory will depend on broader adoption technological developments and overall economic conditions
Advanced Practical Questions
6 What specific factors triggered this selloff beyond general sentiment
Key triggers likely included strongerthanexpected economic data reducing hopes for imminent interest rate cuts outflows from Bitcoin ETFs and geopolitical tensions The initial drop then activated the massive liquidation cascade
7 How do liquidations actually work mechanically
Traders open leveraged positions by posting collateral Exchanges set a liquidation price If the