ETH is testing critical long-term support levels around $1,350-$1,450
The entire crypto market cap dropped by 6%, wiping out approximately $160 billion
Ethereum has experienced a dramatic price collapse, plummeting below the $1,600 mark amid a broader cryptocurrency market sell-off. The second-largest cryptocurrency by market capitalization is currently trading around $1,569, representing a steep decline of over 13% in just 24 hours.
This sharp decline isn’t happening in isolation. The global cryptocurrency market has shed more than 6% of its value in a single day, with the total market capitalization now standing at $2.51 trillion. This represents an approximate loss of $160 billion across the entire digital asset space.
Perhaps most telling is the explosive growth in Ethereum’s trading volume, which has surged nearly 300% during this price drop. Such dramatic increases in trading activity typically signal panic in the markets, with investors rushing to exit positions and large holders making significant moves.
Major Whale Liquidation
Adding fuel to the fire, a large Ethereum investor experienced a catastrophic liquidation on the DeFi lending platform Sky (formerly known as Maker). According to data from Lookonchain and DeFi Explore, this whale lost 67,570 ETH worth approximately $106 million when their collateralized debt position was forcibly liquidated.
The liquidation occurred when the collateral ratio fell to 144% as ETH prices collapsed. Sky’s lending protocol requires users to maintain a minimum collateralization ratio, typically 150% or higher, to secure their borrowed DAI stablecoins.
In such liquidation events, the protocol seizes the ETH collateral and auctions it off to repay the borrowed DAI plus fees. Any remaining collateral after debt repayment is returned to the user, but the forced sale creates additional selling pressure in an already declining market.
Another whale with 56,995 wrapped ETH (worth around $91 million) deposited on the platform was reportedly on the verge of liquidation as well, potentially threatening further market instability.
Technical Outlook
Just five days ago, there was optimism in the Ethereum market as the price was slowly approaching the $1,950-$1,970 resistance zone. A breakout above this level could have potentially pushed ETH to $2,050 or even $2,100.
Instead, sellers emerged, momentum faded, and Ethereum’s price took a nosedive. The key question now facing traders and investors is whether ETH can hold the $1,550 support level. If this level fails to hold, analysts suggest the next support zone could be around $1,450 – a price point not seen since early 2023.
From a broader technical perspective, Ethereum is now testing its long-term logarithmic regression channel, which has historically served as a support zone during major market corrections. This critical support area ranges between approximately $1,350 and $1,450.
The Relative Strength Index (RSI) has plunged to an oversold reading near 27.31, confirming the intense selling pressure. While such deeply oversold conditions often precede consolidation or relief bounces, the breach of multiple support levels suggests caution.
Market-Wide Liquidations
The current market turmoil extends far beyond Ethereum. According to data from CoinGlass, approximately 320,000 traders have been liquidated over the past 24 hours, with losses totaling almost $1 billion. The majority of recent liquidations have been Ethereum positions.
ETH remains down 68% from its all-time high achieved in 2021. Further losses could trigger more DeFi user liquidations unless they can provide additional collateral to secure their positions.
The last time Ethereum traded at these levels was in October 2023, when the crypto market was still deep in bear territory, almost a year after the collapse of the FTX exchange.
This current price action represents a stark reminder of cryptocurrency market volatility. Just a week ago, market participants were discussing potential bull market scenarios. Now, attention has shifted back to watching critical support levels closely as traders navigate this turbulent environment.
For Ethereum holders and the broader market, the coming days will be crucial in determining whether this is a temporary correction or the beginning of a more prolonged downtrend in the cryptocurrency markets.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear 
