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Ether Market May Become More Exciting Below $4.2K. Here Is Why.
Crypto traders should be cautious of ether prices dropping below $4,200, which could lead to significant long liquidations and increased market volatility.
Updated Aug 18, 2025, 12:49 p.m. Published Aug 18, 2025, 7:00 a.m.
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What to know:
- Crypto traders should be cautious of ether prices dropping below $4,200, which could lead to significant long liquidations and increased market volatility.
- Over 56,638 ETH in long positions, valued at $236 million, are at risk of liquidation if ether falls to $4,170, according to Hyperdash data.
Crypto traders should remain vigilant for an ether price drop below $4,200, which could trigger millions in long liquidations and increase market volatility.
As of writing, over 56,638 ETH in bullish long positions – valued at $236 million – faced liquidation risk on the decentralized perpetual exchange Hyperliquid in case of an ether price drop to $4,170, according to data from Hyperdash.
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The data also showed a risk of sizable liquidations at $2,150-$2,160 and $3,940. At press time, ether changed hands at $4,260, down nearly 5% on the day, according to CoinDesk data.
Andrew Kang, founder of the crypto venture capital firm Mechanism Capital, stated on X that large long liquidations could potentially drive ether prices down to $3,600.
"[I] would estimate we're about to hit $5b in ETH liquidations across exchanges, taking us down to $3.2k - $3.6k," Kang said.
Liquidations, or the forced closure of leveraged bets, happen when a trader's position falls short of the margin requirements set by the exchange.
The margin shortage typically occurs when the market moves against the trader's position, causing their account equity to fall below the minimum maintenance margin. This prompts the exchange to automatically close the position to prevent further losses and ensure borrowed funds are recovered.
Largely long liquidations cause a sudden surge in selling pressure, which pushes prices even lower, creating a cascading effect that can trigger additional liquidations. This negative feedback loop tends to amplify market volatility.
Read more: Dogecoin Sellers in Control as Monero Attacker Votes to Target DOGE; Bitcoin Below $116K
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.
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