Ethereum News Today: Institutional Bets Hinge on Ethereum's $4,500 Survival Test

Ethereum is nearing a critical short liquidation pressure zone as the market remains heavily leveraged, with significant trading activity and volatility observed in recent days. Following a sharp pullback from a record high of $4,950 to around $4,550, Ethereum has seen a 4.5% decline in the past 24 hours, though it remains up 8% on the week. The token has gained over 26% since early August, but the recent correction has triggered substantial liquidations, with more than $720 million in positions cleared across the market in the last 24 hours. Over half of this amount—nearly $500 million—was tied to Bitcoin and Ethereum longs, with the $4,950 level acting as a key point of resistance.

The pullback has led to a test of the $4,500 support level, with analysts closely watching whether this threshold holds. Lennaert Snyder, a market analyst, noted that Ethereum “took liquidity above $4,880 and flushed leveraged longs,” emphasizing that the current test of $4,500 does not appear robust. If this level fails, Ethereum could face further declines toward $4,300, a level that previously marked the start of a strong upward move. On the other hand, a recovery above $4,693 could reignite bullish momentum toward $4,880 and potentially $5,500 if resistance levels are overcome.

Institutional activity has remained strong despite the volatility. Whale buying has intensified, with Wise Crypto reporting that large investors added over $1.6 billion worth of Ethereum in the past week. This accumulation aligns with key Fibonacci retracement levels and suggests continued interest from institutional players. According to analysis from CryptoQuant, whales on Binance have been particularly active since July, with a strategy focused on building positions after clear trend confirmation. Such behavior may offer additional support should Ethereum attempt to rally toward $5,000.

The broader market context also highlights Ethereum's growing appeal. Analysts have noted a shift in institutional focus from Bitcoin to Ethereum, driven by Ethereum’s expanding role in stablecoins, tokenization, and smart contracts. Jeff Mei, COO at BTSE, suggested that Ethereum's smaller market cap compared to Bitcoin could amplify its gains in the event of a Fed rate cut. This view is shared by several analysts, who believe that Ethereum’s momentum could outpace Bitcoin’s in a macroeconomic environment that favors risk-on assets.

While the immediate outlook for Ethereum remains uncertain, historical trends suggest that September often brings corrections after strong August gains. Current data indicates that Ethereum sits in a key price range, with $4,690 representing a potential turning point for bulls. If long-term buying continues and resistance at $4,950 is overcome, Ethereum could face a clearer path to $5,500. However, a sustained break below $4,500 could reinforce seasonal volatility and trigger further selling pressure in a still-leveraged market.

Source: [1] Ethereum Plummets After $4950 Liquidity Grab: Is a Bigger ... (https://cryptopotato.com/ethereum-plummets-after-4950-liquidity-grab-is-a-bigger-dump-coming/?amp) [2] Bitcoin Flash Crash Triggers $550M in Sunday ... (https://www.coindesk.com/markets/2025/08/25/bitcoin-flash-crash-triggers-usd550m-in-sunday-liquidations-as-ether-rotation-builds) [3] ETH Price Prediction: Traders Target $10K ETH Amid $400 ... (https://www.coindesk.com/markets/2025/08/23/ethereum-bets-see-unusually-high-usd400m-liquidations-as-some-now-target-usd10k-eth)