Ethereum News Today: Ethereum Nears $4000 as $1.19 Billion Liquidation Risk Looms

Ethereum (ETH) is nearing the $4,000 level, sparking heightened concerns among traders about the potential for large-scale liquidations. Recent data indicates that if ETH drops below this threshold, approximately $1.19 billion in leveraged positions could face forced selling, amplifying downward pressure on the price [1]. This risk has already begun to materialize, with $105 million in liquidations reported in recent days, signaling growing fragility in the market [6].

Technical indicators point to a bearish outlook, with the moving average convergence divergence (MACD) suggesting potential further corrections. The $4,200 level, once a strong support, has been breached, and $3,500 is now seen as the next critical level to watch [5]. If ETH continues its downward movement, cascading sell orders could strain liquidity on both centralized and decentralized exchanges, compounding volatility across the market [1].

The potential for such large-scale liquidations is not limited to isolated trades. Broader market dynamics could be affected, particularly due to the high volumes of on-chain transactions seen during previous ETH liquidation events. These have historically led to sharp price declines, increased gas fees, and volatile asset performances [1]. If the $4,000 level is breached, a similar pattern may emerge, potentially triggering further downward momentum across the crypto market.

Analysts have emphasized that the coming weeks will be critical in determining whether Ethereum can stabilize or enter a more prolonged downturn. While some remain cautiously optimistic about ETH’s long-term potential, particularly as the backbone of the smart contract ecosystem, they caution that the market must first navigate a volatile September before any stable phase can be expected in the fourth quarter [3].

Meanwhile, Ethereum’s developer community, including co-founder Vitalik Buterin, has remained silent on immediate price developments. This lack of public commentary from key figures has left traders without guidance during a period of heightened uncertainty [1]. As the market closely watches the $3,500 level, a sustained break below this threshold could signal a more significant correction and increase the likelihood of large-scale liquidations and broader market instability [6].

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[1] Drop Below $4000 Could Trigger $1 Billion In Liquidations (https://m.fastbull.com/news-detail/eth-price-crash-drop-below-4000-could-trigger-4340109_0)

[2] Crypto Today: Bitcoin, Ethereum, XRP risk further losses as ... (https://www.mitrade.com/au/insights/news/live-news/article-3-1048012-20250818)

[3] Bitcoin Bulls Must Survive Brutal September Before Q4 ... (https://www.mitrade.com/insights/news/live-news/article-3-1048214-20250818)

[5] Ethereum Fear and Greed Index | Multiple Timeframes (https://cfgi.io/ethereum-fear-greed-index/)

[6] Crypto Crash Alert: $300B Sell-Off Looms for Bitcoin ... (https://www.interactivecrypto.com/crypto-crash-alert-300b-sell-off-looms-for-bitcoin-ethereumare-you-prepared)