The recent trend of Ethereum has once again attracted market attention. Data shows that if the price of Ethereum falls below the $4,200 mark, it could trigger the liquidation of billions of dollars in leveraged long positions, exacerbating market volatility.
According to Hyperdash statistics, there are currently about 56,628 leveraged long positions of Ethereum at risk on Hyperliquid, with a total value exceeding $236 million. If Ethereum falls to $4,170, these positions could be forcibly liquidated.
Moreover, the data shows that there is also a significant liquidation risk lurking in the range of $3,940 and $2,150 ～ $2,160.
As of the time of writing, Ethereum is priced at $4,261, down 4.6% in the past 24 hours.
Andrew Kang, founder of the cryptocurrency venture capital firm Mechanism Capital, pointed out that large-scale long liquidations could push the price of Ethereum down to $3,600.
He further estimates that the total liquidation amount of Ethereum across major exchanges will reach $5 billion, and in the worst-case scenario, the price could drop to the range of $3,200 ～ $3,600.
Liquidation refers to the forced closure of positions by exchanges due to insufficient account margin from leveraged traders, ensuring that the platform can recover borrowed funds.
When the market experiences severe reverse volatility and investors' account equity falls below the platform's set "minimum margin threshold," the system will automatically sell off positions. This forced liquidation often instantaneously increases market selling pressure, dragging the price further down, which in turn triggers the next wave of liquidations, creating a vicious cycle.
This so-called "chain liquidation effect" not only amplifies short-term declines but is often one of the main drivers of extreme volatility in the cryptocurrency market.
"$236 million in long positions at risk! Ethereum falling below $4,200 may trigger a chain liquidation" This article was originally published on (Blockking).
