Ether's 20% Freefall Triggers $1B Liquidation Cascade as Crypto Losses Accelerate
Ethereum's ether (ETH) experienced a sharp decline of over 20% in a two-day period, dropping from nearly $4,000 to around $3,000, its lowest since mid-July. This marks the second severe correction in a month, following an October 10 crash. The decline triggered $970 million in liquidations, mostly from leveraged long positions. Markus Thielen of 10x Research warned that ETH's breakdown may signal further drops, estimating BitMine, the largest ETH holder, has limited capacity to support the asset after accumulating 3.4 million ETH at a cost-basis around $3,909. Additional downward pressure comes from fading ETF demand, low retail interest, and declining Google search trends. Thielen predicts ETH may fall to the $2,700-$2,800 range.
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Ethereum's Sharp Decline
Ethereum's ether (ETH) just tumbled more than 20% by Tuesday in a two-day rout that almost resembled the October 10 crash. Trading just below $4,000 early Monday, the second-largest cryptocurrency by market cap fell to nearly $3,000 by Tuesday afternoon (U.S. hours), reaching its weakest level since mid-July. This marks the second severe correction in a month; on October 10, ETH plunged from $4,500 to $3,440 in a single day, a 25% nosedive.
Current Market Status
As of now, ETH is trading just above $3,200, following a modest bounce. However, it is still down 9.4% over the past 24 hours. According to CoinGlass data, the sharp decline has triggered over $970 million in liquidations across leveraged ETH derivatives markets. Most of the liquidated positions were long trades — speculations betting on higher prices — that were wiped out as ETH pierced through one support level after another.
Expert Analysis by Markus Thielen
Markus Thielen, founder of 10x Research, highlighted alarming insights in a Tuesday note. He warned: "ETH's breakdown leaves little support below and more room to fall." Thielen also pointed out that BitMine, the largest ETH treasury firm, appears to have exhausted its capacity to continue purchasing ETH. BitMine has accumulated approximately 3.4 million ETH, with Thielen estimating the firm's cost-basis to be around $3,909, meaning they are now sitting on $2 billion in unrealized losses.
Concerns Over Future Buyers
Thielen expressed concern over who might be the next incremental buyer of ETH now that BitMine's purchasing momentum has faded. He stated: "While there’s no immediate liquidation risk, the real concern is who will step forward to purchase ETH now." ETF demand, which initially contributed to ETH's rally, has also declined drastically. Inflows peaked at $9.5 billion during July and August but have since fallen flat, with only $850 million of outflows recorded since the October crash.
Retail Demand Weakens
Retail interest in Ethereum has significantly diminished. Thielen noted that Google search trends for Ethereum, a general proxy for retail demand, are now at just 13% of their all-time peak levels. This lack of retail participation further weakens the market's potential recovery efforts.
Ethereum's Next Potential Range
With the key catalysts that fueled ETH's rally to nearly $5,000 in August now gone, Thielen sees $2,700–$2,800 as the next likely landing zone for Ethereum. The recent extreme volatility and lack of fresh demand only intensify concerns about the cryptocurrency's near-term price movement.