Ethereum Plunges Below $4,255 as Liquidations Top $870 Million

Ethereum has taken a sharp turn after weeks of gains, dropping 5% in just 24 hours and sparking concerns of deeper corrections ahead.

What Happened?

After a bullish run that saw Ethereum gain more than 60% in a month, ETH has abruptly reversed course. The cryptocurrency dropped nearly 5% in a single day, trading just under $4,255, with losses totaling over 10% since its monthly peak.

A massive wave of liquidations, profit-taking, and broader market jitters are weighing heavily on the price.

Ethereum’s Rally Crashes Under Liquidation Pressure

Ethereum’s downturn was triggered by a brutal selloff in leveraged long positions. Over $870 million in crypto positions were liquidated within 24 hours, with Ethereum alone accounting for $210.6 million, nearly twice the amount seen in Bitcoin liquidations, according to data from Coinglass.

This wave of forced selling began when ETH broke through crucial support levels over the weekend, triggering a cascade of liquidations. As positions were automatically closed due to margin calls, this selling pressure intensified, pushing prices even lower.

One particularly alarming data point came from Hyperdash, which revealed that over 56,638 ETH worth $236 million in long positions are at risk of liquidation if the price dips to $4,170 on decentralized exchange Hyperliquid. Other pressure points for liquidations lie around $3,940 and even as low as $2,150.

Andrew Kang, founder of Mechanism Capital, commented on X that Ethereum could fall as low as $3,600 or even $3,200 if liquidation volumes escalate across exchanges.

Would estimate we’re about to hit $5b in ETH liquidations across exchanges

Taking us down to $3.2k – $3.6k

Good night https://t.co/QV10jV8mKC pic.twitter.com/zc6BqO38lZ

,Andrew Kang (@Rewkang) August 18, 2025

Ethereum ETFs See Profit-Taking Outflows

Investor sentiment has shifted sharply in recent days. The nine U.S.-listed Ethereum ETFs, which had just posted their best performance week, have started showing weakness. Data from SoSoValue reports that five issuers saw major outflows, including one with a single-day withdrawal of $272 million.

This is a clear signal that institutional investors are locking in gains, contributing further to the decline in price. Retail traders are also participating in the selling, as reflected in on-chain data.

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Marketwide Weakness Amplifies ETH Losses

Ethereum’s crash did not happen in isolation. Bitcoin is down 2.3%, while major altcoins like Solana and XRP are also down around 5%. The broader crypto market is reacting to macroeconomic uncertainty, especially concerns ahead of Fed Chair Jerome Powell’s speech and the unclear timeline for future interest rate cuts.

Technical Signals Suggest More Volatility Ahead

Technically, Ethereum is clinging to the 20-day EMA at $4,134. If this level fails to hold, analysts expect the next key support to be around the 50-day EMA at $3,651.

Momentum is also slowing. The Relative Strength Index (RSI) has dropped to 58, retreating from overbought territory above 70. This indicates that buying momentum is fading and that a neutral or bearish shift is underway.

CoinLaw’s Takeaway

In my experience, when liquidation pressures and ETF outflows collide, markets tend to buckle under the weight. This is exactly what we are seeing with Ethereum. The crash was not just technical or market-wide weakness, it was a perfect storm of overleveraged positions, profit-taking, and fear of macro headwinds.

I found it especially telling that so many institutional investors bailed out of ETH ETFs in just a few days. That’s not retail panic. That’s calculated risk reduction. If Ethereum cannot hold the $4,134 level, we could easily revisit the $3,600 range. Be cautious. Watch those liquidation levels and stay nimble.