Ethereum News Today: A $5 Billion Domino Effect Looms If Ethereum Stumbles

Ethereum faces significant liquidation risks should its price fall below $4,600, with potential long liquidation pressure reaching up to $726 million. This figure underscores the growing vulnerability in leveraged positions, particularly in centralized exchanges, where traders have accumulated large bullish exposure. Data from various platforms highlights the precarious state of these positions and the broader market dynamics at play.

Ethereum's recent performance has been characterized by sharp price swings, with the token reaching a new all-time high above $4,900 in early August 2025. This surge was fueled by increased demand from institutional players, a shift in relative momentum from Bitcoin, and tightening exchange reserves. However, the heightened volatility has also led to increased leverage in the futures market, creating a fragile equilibrium that could be disrupted by even minor price corrections.

Should Ethereum retreat below $4,200, the market is at risk of triggering a cascading wave of forced liquidations. According to Hyperdash data, over 56,638 ETH in long positions—valued at approximately $236 million—is at risk of being liquidated if the price drops to $4,170 on decentralized exchanges. Further pressure points lie at $3,940 and even as low as $2,150, according to the same reports. If this trend accelerates across major centralized exchanges, the liquidation pressure could reach or exceed $5 billion, according to estimates from crypto venture capitalist Andrew Kang.

The impact of such a correction would not be confined to Ethereum alone. The broader cryptocurrency market, including Bitcoin and major altcoins, is showing signs of increased volatility in response to macroeconomic uncertainty and shifting investor sentiment. In the last week alone, Ethereum ETFs have seen notable outflows, including a $196.62 million net outflow on August 18, led by BlackRock’s ETHA, the largest ETH ETF. These outflows suggest a strategic recalibration by institutional investors, with many locking in profits ahead of potential regulatory shifts or macroeconomic developments.

The technical outlook for Ethereum remains mixed. While the token has managed to maintain key support levels in the short term, analysts caution that a sustained breakdown below the 20-day EMA at $4,134 could open the door to further declines. The Relative Strength Index (RSI) has already retreated from overbought territory, signaling a potential shift in momentum. Institutional outflows and the risk of large-scale leveraged liquidations are compounding the challenges for Ethereum in the near term.

Market commentators and analysts are closely monitoring the situation, with some suggesting that the coming days could determine whether Ethereum consolidates its recent gains or enters a deeper correction phase. The liquidation risks, combined with macroeconomic concerns, present a high-stakes scenario for traders and investors alike.

Source:

[1] As ETH breaks above USD4,900, analyst sums up crypto market: BTC is exhausted, ETH isn’t (https://www.coindesk.com/markets/2025/08/24/as-eth-breaks-above-usd4-900-analyst-sums-up-crypto-market-btc-is-exhausted-eth-isn-t)

[2] Ethereum jumps to record price move (https://finance.yahoo.com/news/ethereum-jumps-record-price-move-184709473.html)

[3] Ether Market May Become More Exciting Below $4.2K. Here Is Why (https://www.coindesk.com/markets/2025/08/18/ether-market-may-become-more-exciting-below-usd4-2k-here-is-why)

[4] Ethereum Price Crash: $2 Billion In Losses Is Waiting For (https://www.mitrade.com/insights/news/live-news/article-3-1051210-20250819)

[5] Ethereum Plunges Below $4255 as Liquidations Top $870M (https://coinlaw.io/ethereum-liquidation-selloff-in-august)

[6] Ethereum Short Liquidations Exceed $178M as Prices Climb (https://intellectia.ai/news/crypto/ethereum-short-liquidations-surpass-178m-amid-price-surge)

[7] Ethereum Shorts Face Massive $350M Devastation as ETH Surges (https://www.bitget.com/news/detail/12560604926379)