Ethereum broke below the $3,900 mark, hitting a nearly seven-week low, extending the significant cryptocurrency pullback seen this week. The entire cryptocurrency market has lost over $140 billion in market capitalization.
In the early hours of September 26th, the world's second-largest cryptocurrency, Ethereum, fell over 7% at one point, touching a low of $3,823, before a slight rebound; its intraday loss remained at 6.55%.
Coinglass data shows that nearly 250,000 traders were liquidated globally in the past 24 hours, with total liquidation amounts exceeding $1.1 billion.
A liquidation heatmap indicates that Bitcoin and Solana recorded the second and third largest liquidation volumes respectively, after Ethereum. As of the close in New York on Thursday, Bitcoin fell 3.62%, breaking below the key support level of $110,000, while Solana dropped 7.2%, marking its sixth consecutive day of decline.
Cooling institutional inflows exacerbated the selling pressure. Since this Monday, investors have withdrawn nearly $300 million from US-listed Ethereum ETFs. Just on Monday, a sudden market drop led to $1.7 billion worth of long positions being forcibly liquidated instantly, impacting almost all major cryptocurrencies.
According to Rachael Lucas, a cryptocurrency analyst at BTC Markets, Ethereum's pullback stems from "cooling institutional inflows" and "technical indicators suggesting short-term pressure." Lucas warned that if Ethereum falls below $3,800, it is expected to trigger further liquidations.
Although the supply of Ethereum on exchanges has dropped to a nine-year low, hinting that long-term holders are hoarding the coin, selling by long-term holders has offset the positive impact of new fund inflows, leaving Ethereum caught in a tug-of-war between bullish and bearish forces.
Long-Term Holder Selling Offsets Positive Signals
Despite the continuous decline in Ethereum exchange supply to a nine-year low, indicating investors are withdrawing tokens from centralized platforms for long-term holding, the market still faces selling pressure from long-term holders.
Over the past month, investors have cumulatively purchased more than 2.7 million Ethereum, worth over $11.3 billion, showing strong confidence in Ethereum's long-term potential.
However, Ethereum's liveliness metric has been on an upward trend. This metric measures long-term holder behavior, and an increase typically means these investors are selling rather than accumulating.
Analysis points out that selling by long-term holders has offset the bullish pressure from new fund inflows, leaving Ethereum in a stalemate between two opposing market forces.
If long-term holders continue to sell in large volumes, Ethereum's price could fall further, which would completely break the current bullish expectations.
