Ethereum News Today: Ethereum Whales Split: Buy the Dip or Capitulate as $4K Dips

Ethereum (ETH) experienced a significant price correction in late September 2025, dipping below the $4,000 threshold amid volatile whale activity and widespread liquidations. A prominent whale address (0xa523) faced a total loss exceeding $45 million after its 9,152 ETH long position was fully liquidated, triggering over $178.5 million in Ethereum-related liquidations. This event occurred alongside broader market turbulence, with altcoin liquidations surpassing $1.7 billion and Ethereum accounting for $212.9 million of that total .

The price decline, which saw ETH briefly fall to $3,825 on Coinbase, coincided with a sharp reset in open interest, erasing excessive leverage from the derivatives market. While the immediate impact was a 10% weekly drop in ETH's value, whale activity revealed a divided market. Some whales capitalized on the dip by accumulating 201,000 ETH ($855 million) on September 25 alone, while others, including Grayscale, shifted ETH to exchanges and executed $275 million in short positions . This duality underscored a shift in strategy among large holders, with some viewing the dip as a capitulation event and others as a buying opportunity.

A separate whale (0xa534) also faced a $35 million loss on its ETH long position, prompting a shift to a short position in Bitcoin (BTC). However, this move led to an additional $614,000 loss within an hour, with the whale now holding a $150 million short position in BTC . Meanwhile, another whale liquidated ETH holdings at $4,221 in late September, realizing a $11.6 million profit before opening a $137 million short position on Hyperliquid, which currently faces a $4 million unrealized loss . These actions highlight the high-stakes and volatile nature of whale trading, where rapid price swings can amplify both gains and losses.

The market reaction to these events was mixed. Spot Ethereum ETFs in the U.S. recorded $795.56 million in outflows over five days, reflecting reduced institutional confidence in the short term . Conversely, opportunistic whales and long-term accumulators added over 570,000 ETH ($2.3 billion) during the September dip, signaling continued belief in Ethereum's long-term value. Short sellers and derivatives platforms also benefited, with Hyperliquid reporting a $29.12 million single liquidation and increased trading activity .

Analysts attribute the volatility to a combination of leveraged positions, speculative trading, and whale-driven strategies. The RSI for ETH reached extreme oversold conditions, a historical precursor to rallies, but persistent ETF outflows and bearish sentiment from major players could prolong consolidation . Institutional participants remain cautious, with regulators closely monitoring leveraged trading and stablecoin usage amid heightened volatility.

Looking ahead, Ethereum's ability to retest and hold the $4,000 level will be critical. While whale accumulation and oversold indicators suggest potential for a rebound, macroeconomic uncertainties and regulatory developments could influence the trajectory. If Ethereum regains strength, it could pave the way for a broader altcoin rally, but prolonged weakness might delay institutional adoption until price stability is restored.

Source: [1] MarketMinute - Ethereum Plunges Below $4,000 Amidst Whale Volatility (https://markets.financialcontent.com/dailybreeze/article/marketminute-2025-9-29-ethereum-plunges-below-4000-amidst-whale-volatility-and-massive-liquidations) [2] Ethereum ($ETH) Whale Incurs $35M Loss (https://blockchainreporter.net/ethereum-eth-whale-incurs-35m-loss-shifts-to-short-while-facing-additional-614k-hit) [4] Lookonchain Feed (https://www.lookonchain.com/feeds/31758)