Ethereum News Today: Ethereum Falls Below $4,400 as Whale Outflows and Liquidations Drive Volatility

Bitcoin and Ethereum have experienced recent price declines as large holders, often referred to as “whales,” have been exiting positions. The movement has triggered increased volatility and raised concerns among traders and analysts about the potential for further downward pressure on the assets. Reports indicate that Ethereum’s price has fallen below the $4,400 mark, extending a decline from a recent high of $4,700, despite the asset maintaining otherwise stable fundamentals [1]. The sell-off was compounded by a major liquidation event on August 13, where traders with long positions worth approximately $100 million were forced to close their positions as Bitcoin dropped below $116,000 and Ethereum fell below $4,300 [2].

Significant outflows from major exchanges have been reported, with over 200,000 ETH—worth around $888 million—being withdrawn from platforms such as Binance and Coinbase in a short period [3]. These outflows are typically interpreted as bullish signals, as large holders often move assets to cold storage or staking mechanisms, suggesting confidence in future price appreciation. However, the timing of these withdrawals has coincided with a broader market correction, leading to mixed interpretations among analysts.

On the derivatives market, bearish sentiment is also evident. Open interest in Ethereum futures has fallen by 29% in two days, following the price decline from over $4,700 to below $4,400 [3]. This reduction in open interest suggests that traders are rapidly closing or liquidating positions amid increased market turbulence. Additionally, perpetual futures funding rates have turned negative across major exchanges, indicating that short positions are dominating the market. Negative funding rates typically reflect bearish expectations and can serve as a precursor to market bottoms if other bullish indicators align [3].

The recent Ethereum liquidity crisis has also raised concerns about the risk of systemic whale leveraged position collapses. A potential cyberattack on a major decentralized finance (DeFi) platform could force whales to liquidate their holdings, further exacerbating price volatility [4]. Moreover, the Ethereum validator exit queue has surged to a record 855,158 ETH, which may be contributing to the recent pullback in the asset’s price [5]. This record number of pending exits suggests that a large number of participants are looking to withdraw their staked assets, potentially increasing supply pressure on the open market.

Despite the recent downturn, some analysts remain cautiously optimistic. One analyst has ruled out a major correction in Ethereum before it reaches the $5,000 level, suggesting that the market may stabilize at higher levels before continuing its upward trajectory [1]. Another analysis highlights that similar waves of exchange withdrawals have historically preceded notable price rallies, indicating that current outflows might eventually support a long-term bullish trend [3].

However, traders are being urged to remain cautious. Prices dropping below $4,200 could lead to significant long liquidations and increased volatility, which could prolong the bearish phase [6]. The current market environment reflects a tug-of-war between bearish derivative market positioning and bullish spot outflows. While the latter provides a potential floor for Ethereum’s price, the former suggests further downward movement is likely in the near term.

Ethereum's current price of $4,446 shows a slight gain of 0.19% in the past 24 hours, and the $4,400 level is being closely watched as a key support zone [3]. A decisive rebound from this level could validate the idea that Ethereum is oversold, while continued weakness may see the price test lower levels before any meaningful recovery takes hold.

Sources:

[1] Bitcoin Slides As Whales Take Profits; Ethereum, Dogecoin Also Slip: Analyst Rules Out Major ETH Correction Before It Hits $5,000

https://www.benzinga.com/crypto/cryptocurrency/25/08/47176235/bitcoin-slides-as-whales-take-profits-ethereum-dogecoin-also-slip-analyst-rules-out-major-eth-correction-before-it-hits-5000

[2] Rapid $100M Crypto Long Liquidations Hit BTC & ETH

https://coinfomania.com/crypto-long-liquidations-bitcoin-ethereum-drop/

[3] Ethereum Outflows Top $888M As Binance And Coinbase Shrink

https://bitcoinist.com/ethereum-outflows-top-888m-binance-coinbase-shrink/

[4] Ethereum's Liquidity Crisis and the Risk of Systemic Whale ...

https://www.ainvest.com/news/ethereum-liquidity-crisis-risk-systemic-whale-leverage-collapse-2508/

[5] The increasing number of ETH waiting to exit staking may ...

https://www.odaily.news/en/newsflash/443760

[6] Ether Market May Become More Exciting Below $4.2K

https://www.coindesk.com/markets/2025/08/18/ether-market-may-become-more-exciting-below-usd4-2k-here-is-why