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Ethereum price drops 4% as short-term traders lock profits and trigger capital outflows.
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Over 70% leveraged long positions leave Ethereum vulnerable to sudden liquidations and deeper corrections.
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Ethereum support lies between $4,250–$4,400; rebound could spark rally toward $6,650 upside target.
Ethereum, the world’s second-largest cryptocurrency, has entered a cooling phase after weeks of strong performance. ETH is currently trading near $4,487, slipping around 4% in the past 24 hours.
While the long-term picture for Ethereum looks promising, recent weakness shows that traders are taking a step back, raising the question—why is ETH falling now?
Short-Term Selling Pressure Led To Failed Breakout
One of the biggest reasons for the dip is short-term profit-taking. Data shows significant capital outflows from Ethereum over the past week, including a sharp $225 million migration on October 7. This reflects traders moving money out of ETH, either to lock in profits or to rotate into other assets.
At the same time, technical indicators suggest that ETH’s upward momentum has slowed, with signals like the MACD and KDJ flashing near-term exhaustion.
Ethereum tried to push past the $4,800 resistance multiple times but failed to hold gains above that level. This created a bearish divergence on short-term charts, signaling that buying momentum was weakening.
Too Many Long Bets
Another factor weighing on the price is positioning. More than 70% of leveraged traders are betting on ETH going higher. While this shows optimism, it also creates risk.
If selling pressure rises, these overleveraged long positions could trigger liquidations, leading to sharper price drops.
Whales and Institutions Still Confident
Despite the short-term weakness, long-term sentiment remains strong. Whale wallets have been adding more ETH, including BitMNR’s increase to 2.83M ETH holding, showing confidence in future gains.
At the institutional level, the SEC’s approval of Grayscale’s ETH ETF and Fidelity’s expansion of its tokenized ETH fund show growing institutional interest in Ethereum, which could boost demand.
What’s Next for Ethereum?
For now, ETH faces a key support zone between $4,250 and $4,400. Despite the dip, analysts stay positive, noting that a strong rebound from current support could reignite buying and push Ethereum back toward $4,700 and beyond.
However, if this level breaks, it may open the door toward $5,500–$665,0 in the coming months.
On the downside, losing support near $3,825 could trigger a deeper correction.