Ethereum price drop below $4600 may trigger $726 million in long liquidation pressure on mainstream CEXs.

Ethereum's price drop below $4600 would trigger $726 million in mainstream CEX long liquidation pressure, while a price increase above $4800 would result in $924 million in short liquidation pressure. The liquidation chart shows the relative significance of each liquidation cluster to its adjacent cluster, with higher bars indicating a more intense price response due to a liquidity avalanche.

Ethereum (ETH), the second-largest cryptocurrency, has experienced significant volatility in recent weeks, with its price dropping below $4,600. This price action has triggered substantial liquidation pressure across mainstream centralized exchanges (CEX). According to liquidation trackers, a drop below $4,600 could result in $726 million in long liquidations, while a price increase above $4,800 could lead to $924 million in short liquidations.

The liquidation chart, as reported by Coinglass, provides a visual representation of the intensity of potential liquidations. Higher bars on the chart indicate more significant liquidation clusters, reflecting how price movements could incite a liquidity cascade. A pronounced bar signals that price levels hit could unleash significant market reactions, reflecting intricate trader positioning within the Ethereum market [2].

The liquidation pressure is a result of the Ethereum price's recent sharp pullback, which dropped nearly 5% to around $4,270. This decline was triggered by global economic news, shifting Federal Reserve expectations, and a wave of liquidations that shook the market [1]. The price drop has brought panic among investors, especially long-term ones, leading to a massive sell-off and further crashing the Ethereum price.

Institutional investors are also adding pressure to the market. On August 15, ETH spot ETFs recorded $59.3 million in outflows, signaling that big funds are pulling back after weeks of steady inflows. Additionally, a large whale transferred 12,202 ETH (worth $54 million) to exchanges, hinting at profit-taking after last month’s 19% rally. These moves have added more selling pressure to an already fragile market [1].

The overall crypto market is struggling, with Bitcoin dropping nearly 3% to $115,000, weighing heavily on altcoins and DeFi tokens. Ethereum's decline comes as the broader market struggles, and a sharp breakdown here could trigger a wider sell-off across the industry [1].

Arthur Hayes, the co-founder of BitMEX, has recently reversed his bearish stance on Ethereum. After purchasing ETH after a $4,000 breakout, Hayes projects that Ethereum could reach $10,000 to $20,000 in the next 3-4 years. He attributes this bullish outlook to anticipated capital flows from digital asset treasury companies raising funds to purchase cryptocurrencies [3].

Hayes frames his bullish thesis around Donald Trump's presidency, expecting a "massive bull market" in financial assets connected to Trump's priorities between now and when he exits office. He emphasizes that if Trump succeeds in the 2026 election, voter satisfaction will depend on economic advancement and wealth creation. The investor believes Trump’s focus on appearing successful will drive supportive policies for assets he considers important, including cryptocurrencies [3].

The liquidation pressure and market dynamics surrounding Ethereum's price movement highlight the need for investors to stay vigilant and monitor key support and resistance levels. While the current market conditions present challenges, the long-term outlook remains positive for those who believe in Ethereum's potential.

References:
[1] https://coinpedia.org/news/eth-price-crash-drop-below-4000-could-trigger-1-billion-in-liquidations/
[2] https://en.coinotag.com/breakingnews/ethereum-price-alert-key-levels-for-long-and-short-liquidations-revealed/
[3] https://coinedition.com/arthur-hayes-turns-bullish-on-ethereum-sees-10k-20k-in-3-4-years-under-trump-era/