What Caused the Ethereum Price Crash and What Traders Should Know?

The recent dip in ETH has reignited fear across crypto markets. Having rallied by a stunning 104% in the last three months, the Ethereum price crash has everyone looking on in wonder. 

Traders to analysts, everyone is looking to understand what's causing this instant sell-off. 

AguilaTrades Suffers $27M Loss After Flipping ETH Positions

As per the Lookonchain, few traders have felt the sting of the Ethereum price crash like AguilaTrades, whose bold moves have turned into heavy losses. 

Source: Lookonchain

He first opened a large short position on ETH, expecting the price to fall. But when it surged past expectations, he quickly switched to a long position betting the price would go up instead.

That move briefly paid off, giving him a $3 million profit after being down $35 million. But the rally didn’t last. 

The market reversed again, and now AguilaTrades is sitting on a staggering $27 million loss. In a recent update, he closed part of his trades 6,832 ETH and 1,134 BTC at a $1.1 million loss. 

Despite this, he is still holding a huge short position of 50,000 coins. It is worth $186m. With an unrealized loss of more than $7m. 

What’s Causing the Ethereum Price Crash?

This Ethereum Price Crash is a combination of market indicators and investors’ actions. 

  1. It’s 7-day Relative Strength Index (RSI) shot up to 96.18, its most overbought level since May 2025. When RSI gets that high, it often signals that a price drop is near and that’s exactly what played out. 

  2. Its also hit strong resistance around $3,775 and couldn’t push past it. 

  3. On top of that, it touched the Fibonacci 23.6% retracement level at $3,446, which is a spot where many traders expect prices to reverse. 

  4. As a result, profit-taking kicked in, and it dropped by 2.54% in just 24 hours. The coin is currently trading at $3713 as per the CoinMarketCap. 

Source: CoinMarketCap

ETH Faces Outflows as Bitcoin Gains Favor

Part of this Ethereum price crash is also linked to where investors are putting their money. 

Bitcoin ETFs have recently experienced outflows of $131m. In contrast, ETH ETFs recorded an inflow of $297 million. 

That indicates some investors are selling at this digital coin highs and seeking safer shores, potentially shifting to Bitcoin. 

While technical indicators depicts:

  • MACD still shows bullish momentum (+88.38). 

  • This cryptocurrency is trading above its 200-day average at $2,541, but if the selling pressure continues, a dip toward the $3,650 support level is very possible.

SEC’s Paul Atkins: ETH Is Not a Security

Comments from SEC Commissioner Paul Atkins might have added to the uncertainty. 

He said that ETH, like Bitcoin, isn’t considered a security by the SEC but his tone was cautious. For many, it just added another reason to sell, deepening the Ethereum price crash. 

Ethereum Price Prediction

Looking ahead the Ethereum Price Prediction, there are both bullish and bearish signals. 

  • This cryptocurrency remains to experience strong institutional demand, registering $3.1 billion in spot ETF volume per day.

  • The next Pectra upgrade promises to increase the network's speed and efficiency.

  • Whales have been quietly buying over $2.57 billion in ETH accumulated since July 2023. 

But risks are still there: 

  • The RSI at 96 shows the market is overheated. 

  • If this crypto fails to hold support, we could see more downside before any recovery begins.

Target Price: 

ETH may retest support near $3,650 short-term. If selling continues, a drop to $3,446 is possible. However, a bounce above $3,775 could open targets up to $4,330.

Conclusion

Although this digital currency still demonstrates long-term resilience, short-term forces are at work. At this point, caution should prevail and strategy has become a more important issue than ever before. 

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