Ethereum News Today: Ethereum Whales Trigger $120M Liquidations as $3K Support Tested

Ethereum faces a critical juncture as a major whale's sell order nears completion, marking one of the largest ETH liquidation events in recent months. The whale, who had opened a massive $537 million long position at $3,175, now holds a $20.5 million unrealized loss following a 4.7% drop in price on December 12 according to analysis. The broader market is also feeling the pressure, with over $120 million in ETH liquidations reported in the past 24 hours according to data.

The sell-off has been amplified by a rare on-chain phenomenon: Ethereum's price is nearing the realized price level of large whales holding 100k+ ETH. According to CryptoQuant data, this event has only occurred four times in the past five years according to reports.

Historically, such moments have triggered accumulation waves where whales buy the dip and stabilize the market. However, with current volatility persisting, the risk of further sell-offs remains high.

Market participants are closely watching whether Ethereum can hold the $3k level, a critical support point that has repeatedly been tested over the last few weeks. A breakdown below this level could lead to cascading liquidations and additional downward pressure. Conversely, a strong rebound may indicate the start of a new accumulation phase according to market analysis. The stakes are particularly high given the size of outstanding long positions and the growing number of traders who entered the market on the peak.

The Whale's Move and Market Impact

Ethereum's current volatility is not only impacting retail traders but also exposing the risks for large institutional players. A recent incident highlighted the fragility of bullish positions, where an Ethereum trader lost $3.24 million in just 14 hours after entering a long position at the peak of the market. Despite partially closing the position, the trader still holds 11,793 ETH, with an unrealized loss of $2.66 million according to reports. This case exemplifies the dangers of FOMO-driven entries in a highly leveraged market environment.

The trader's predicament is emblematic of a broader trend: as Ethereum moves lower, traders with long positions are being forced to reassess their strategies. Those unable to add to their positions or cut losses quickly face growing margin pressures. This is particularly true for leveraged longs, as falling prices threaten to trigger further liquidations. The cumulative effect of such actions could lead to a self-reinforcing sell-off, pushing Ethereum further from key support levels.

Market Sentiment and Price Projections

Analysts remain divided on Ethereum's short- and long-term trajectory. While the current price is hovering around $3,105, some bullish predictions for 2025 suggest a potential surge to $6,925, with even more aggressive forecasts hinting at $15,575 by 2030 according to price projections. These projections are based on assumptions of continued adoption in decentralized finance (DeFi), non-fungible tokens (NFTs), and blockchain infrastructure. However, the market is still grappling with the aftermath of recent liquidations, which forced heavy selling and increased uncertainty.

At the same time, on-chain data shows whales are preparing to absorb selling pressure. As Ethereum's price moves closer to the realized price of whale wallets, large investors are likely to step in to buy the dip and secure their positions. According to CryptoQuant, this has historically been a positive sign for long-term price movement according to analysis. If whales act in a similar fashion now, it could stabilize the market and potentially trigger a new bull phase.

Risks to the Outlook

Despite these bullish signals, risks remain high. A key concern is whether Ethereum can avoid a further breakdown below the $3k level. A breach could lead to a cascade of liquidations, especially for leveraged longs that have little room to absorb price swings. With market volatility already elevated, any additional downward movement could trigger a wave of panic selling, further exacerbating the downturn.

Another factor is the current state of trader positioning. Data from Coinglass indicates that Ethereum is currently experiencing a significant shift in sentiment, with fear dominating the market. This is evident in the growing number of long liquidations and the reluctance of traders to re-enter the market on dips. While this could present buying opportunities for patient investors, it also highlights the fragility of the current market structure according to market analysis.

What This Means for Investors

For now, investors should remain cautious. While whale activity suggests a potential floor to the current sell-off, the market is still in a delicate state. Retail traders who entered at the peak should reassess their risk exposure, particularly if Ethereum continues to weaken. For those looking to buy the dip, the key will be to wait for a confirmed rebound above $3k, which could signal the start of a new accumulation phase according to market indicators.

Meanwhile, institutional investors and large traders are likely monitoring the situation closely. If Ethereum does find support, it could attract fresh capital, especially with Ethereum's upcoming upgrades and growing adoption in the DeFi space. However, given the current volatility and liquidity constraints, investors should proceed with care.