Ethereum's "Excessive Leverage Crash": Two Major Factors Reveal the Truth Behind the Sudden Drop

In the past 24 hours, the price of Ethereum has fallen by about 5%, retreating 10.6% from this month's peak of $4,759. This wave of correction began over the weekend, ending a robust monthly increase of over 60%. So, who is behind this sudden drop?

① Huge Liquidation Wave - Leveraged "Longs" Targeted in a Chain Reaction

The drop in Ethereum triggered a large-scale forced liquidation. After breaking through key support levels last weekend, billions of dollars in leveraged long positions were liquidated, leading to a series of sell-offs. Data shows that in just the past 24 hours, the total liquidation in the crypto market exceeded $870 million; among which Ethereum's liquidation amounted to $210.6 million, nearly double that of Bitcoin.

👉 This indicates that the market had previously accumulated excessive leverage on Ethereum, and the chain liquidation intensified the decline.

② ETF Cooling Down + Profit Taking

Ethereum ETFs quickly cooled down after experiencing "the strongest week since their launch." On the latest trading day, nine Ethereum ETFs in the U.S. collectively closed down, with five issuers experiencing significant fund outflows, the largest single-day outflow reaching $272 million. This means that funds that had previously bought in large amounts began to cash out, further increasing selling pressure in the market.

③ Technical Risks and Key Levels Currently, Ethereum is just slightly above the 20-day EMA ($4,134). If it breaks below this level, it may test the 50-day EMA ($3,651).

Falling below the 50-day moving average would signify a deeper correction, potentially erasing most of the recent rebound gains. To regain bullish momentum, it needs to reclaim $4,500; while $4,750–$4,800 remains a key resistance area for hitting a new all-time high.

🔎 Summary:

This round of decline is mainly attributed to the excessive leverage liquidation and ETF fund cooling down. Short-term risks remain, but the long-term fundamentals are still robust. Investors should be wary of the gains and losses of support below, while also paying attention to changes in ETF fund flows.

Disclaimer: The content of this article is for information sharing only and does not constitute investment advice. The cryptocurrency market is highly risky and volatile; investment decisions should be made cautiously. #ETH走势分析 $ETH