Ethereum Faces $2B Liquidation Risk at $4,200 Support
Ethereum trades around USD 4,230 after a 6% drop in 24 hours. Long positions worth over USD 2 billion face liquidation if prices breach the USD 4,200 support level, with sizeable clusters on Binance (USD 52M), OKX (USD 21M) and Bybit (USD 23M). Conversely, short positions totalling USD 2.8 billion could liquidate on a rebound to USD 4,500. Net ETH shorts on the CME have reached record highs, heightening volatility.
Institutional demand remains strong. BitMine added 373,000 ETH last week, lifting its treasury to USD 6.6 billion. This provides key buying support. However, ETF outflows and whale selling add headwinds. SoSo Value reports a USD 196.6 million net outflow from ETH ETFs on August 18, led by USD 87.2 million redeemed from BlackRock’s ETHA. On-chain data shows whales like Longling Capital selling 5,000 ETH and dormant holders offloading another 3,000 ETH.
Technical analysts identify USD 4,200 as critical support, with resistance at USD 4,550–4,571. A clean break above USD 4,780 could set the stage for a test of USD 5,000. Traders should also watch this week’s macro catalysts—FOMC minutes, U.S. jobless claims and Fed Chair Powell’s remarks—for further market moves.
Bearish
In the short term, the threat of over USD 2 billion in long liquidations at the USD 4,200 support and near-record net shorts on the CME increases selling pressure. ETF outflows and whale selling further compound bearish sentiment. Although institutional buying by BitMine offers support, it may not fully offset forced selling and liquidity hunts around key levels. Over the longer term, a clear break above USD 4,780 and sustained ETF inflows would be needed to restore confidence. Until then, downward risks outweigh upside potential, making the outlook bearish for Ethereum.