Ethereum Slumps 2.66% Amid $650M Liquidations, Eyes Bull Flag Pattern and $10K Target

Ethereum's latest price was $4140.58, down 2.657% in the last 24 hours. Despite the recent decline, the broader market sentiment surrounding the cryptocurrency remains cautiously optimistic, with analysts suggesting that the correction is part of a natural cycle. The price has seen a pullback of approximately 8%, settling near $3,940, which has led to substantial liquidations across the crypto market. Over $650 million in leveraged positions were wiped out, with Ethereum long positions accounting for $114.5 million of that amount. The largest single liquidation occurred on the OKX exchange, totaling $5.5 million in Ethereum. Nevertheless, many traders and analysts see this as a temporary setback rather than a sign of a long-term bearish trend.

From a technical perspective, Ethereum is forming a potential bullish pattern known as a bull flag. This pattern typically indicates a consolidation phase after a sharp upward move and suggests the possibility of a breakout. Ethereum is currently retesting the lower boundary of this flag near $3,870, which serves as a key support level. A successful break above the upper trendline at $4,440 could signal the start of a new upward movement. Analysts project that a breakout at this level could see Ethereum rise as high as $10,050, a 164% increase from its current price. However, this optimistic scenario hinges on Ethereum maintaining its key support levels and successfully surmounting the upper trendline.

Indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are showing signs of building buying pressure. The RSI has broken out of a multi-year downtrend, signaling a potential reversal in momentum. Meanwhile, the MACD has shown bullish divergences, suggesting that the downward pressure may be easing. Traders are also keeping a close eye on the ETH/BTC ratio, as a reversal in this metric could indicate renewed interest in Ethereum as an alternative to Bitcoin. Experts like Michael van de Poppe of MN Capital have noted that Ethereum is now in an “ideal zone for buys” following the recent correction, suggesting that the market is setting up for a potential rebound.

Despite the bearish signals from some market indicators, Ethereum’s broader position in the crypto landscape remains strong. The recent outflows from Ethereum-backed ETFs highlight a shift in institutional sentiment, with a notable decline in participation. On one day alone, these funds recorded $428.52 million in redemptions, the largest single-day capital exit since August. BlackRock’s iShares Ethereum Trust was the most affected, with $310.13 million in redemptions, followed by other major funds like Grayscale’s Ethereum Trust and Fidelity’s Ethereum Fund. These outflows indicate a more cautious approach by institutional investors, who are likely waiting for clearer macroeconomic signals before committing to larger positions in the asset.

Looking beyond the financial market, Ethereum continues to make strides in real-world blockchain adoption. One of the most significant developments is the migration of Bhutan’s National Digital Identity (NDI) system from the Polygon network to the Ethereum blockchain. This move is part of Bhutan’s larger digital transformation strategy and aims to enhance the security and efficiency of government services. With a population of over 800,000, the NDI system plays a vital role in Bhutan’s digital infrastructure. By adopting Ethereum’s decentralized framework, the country is working to reduce the risks associated with centralized data storage and provide its citizens with a more secure and self-sovereign identity system.

The migration to Ethereum is expected to be completed by the first quarter of 2026 and represents a major milestone in the adoption of public blockchain technology for national governance. Ethereum’s robust security features and decentralized infrastructure make it an ideal choice for such a critical initiative. Aya Miyaguchi, President of the Ethereum Foundation, has expressed enthusiasm about Bhutan’s commitment to self-sovereign identity, calling it a meaningful step toward leveraging decentralized technology for societal benefit. The project also reflects the growing global interest in blockchain for public services, particularly in areas such as identity verification, digital governance, and secure data management.

For Bhutanese citizens, the transition to Ethereum is expected to bring significant improvements in the accessibility and efficiency of government services. The new system will allow residents to verify their identities securely and efficiently, reducing administrative burdens and enhancing the overall user experience. This initiative also sets a precedent for other nations exploring blockchain-based solutions for digital identity. As more countries seek to modernize their infrastructure, Bhutan’s approach could serve as a valuable case study, demonstrating how decentralized systems can enhance security and efficiency in public governance.

Collaboration between key figures in the Ethereum ecosystem and Bhutan’s government has further emphasized the strategic importance of this project. Ethereum co-founder Vitalik Buterin, along with Bhutan’s Prime Minister Tshering Tobgay and Crown Prince Jigme Namgyel Wangchuk, has been actively involved in the initiative. Their participation highlights the growing recognition of blockchain’s potential to address challenges related to data privacy, security, and accessibility in public services. The project also reflects a broader trend of governments exploring blockchain technology as a tool for modernization and transparency in governance.

The migration of Bhutan’s NDI system to Ethereum marks a significant step in the global adoption of blockchain for public services. By leveraging a public and open blockchain, Bhutan is demonstrating how decentralized technology can be used to enhance transparency and trust in governance. While challenges remain, the potential benefits of this transition are clear. As the project moves forward, it will be closely watched by other nations considering similar initiatives. The success of this endeavor could provide valuable insights into the scalability and practicality of blockchain in national infrastructure, further reinforcing Ethereum’s role as a foundational platform for decentralized innovation.