Ethereum Market Analysis: Sharp Correction Below $4,000 as Liquidations Mount
September 26, 2025 – Ethereum (ETH) has experienced a significant downturn over the past 24 hours, breaking below the crucial psychological support level of $4,000. The sharp price decline has been accompanied by substantial long liquidations and a notable increase in trading volume, indicating a period of heightened market volatility and a prevailing bearish sentiment.
1. Price Action
- 24-Hour High/Low: Ethereum reached a high of approximately $4,172.56 before tumbling to a low of $3,833.75.
- Current Price & Percentage Change: As of this report, ETH is trading around $3,887.63, representing a decline of approximately 6.49% over the last 24 hours.
- Trading Volume: The 24-hour trading volume has surged to over $57.2 billion, an increase of more than 43% from the previous day, signaling a significant rise in market activity amidst the price drop.
2. Technical Indicators
- Exponential Moving Averages (EMAs): Ethereum is currently trading below its 20-day EMA, a short-term bearish signal. However, it remains above the longer-term 50, 100, and 200-day EMAs, which typically provide underlying support. The current price action does not suggest an imminent ‘golden cross’ or ‘death cross’ formation.
- Relative Strength Index (RSI): The RSI on shorter timeframes, such as the 1-hour chart, has dipped to 26, indicating oversold conditions. The daily RSI is at 34, which points to continued weakness but is approaching oversold territory. This suggests that while momentum is bearish, a short-term bounce could be possible.
- Moving Average Convergence Divergence (MACD): The MACD is currently in bearish territory, with the MACD line below the signal line, confirming the downward momentum. The histogram indicates that sellers are in control.
- On-Chain Data: The last 24 hours have been marked by significant liquidations, with over $409 million in ETH long positions being liquidated. This was part of a broader market deleveraging event that saw over $1 billion in liquidations across all cryptocurrencies. In contrast to the selling pressure, on-chain data also reveals significant accumulation by large holders. In one of the largest single-day on-chain movements this year, 11 wallets accumulated nearly 296,000 ETH (valued at approximately $1.19 billion) from various exchanges.
3. Support and Resistance
- Immediate Resistance: The primary resistance level for Ethereum is the recently broken $4,000 mark. A move above this could see further resistance around the $4,050 to $4,120 zone. The 50% Fibonacci retracement level of the recent downward move also sits near $4,050.
- Key Support: Immediate support is being tested in the $3,820 to $3,880 range. A crucial support zone identified by analysts lies between $3,800 and $4,000. If this level fails to hold, the next significant support levels are projected to be around $3,750 and potentially a deeper correction towards $3,626.
4. Fundamental News
- Ethereum-Specific News: Within the last 24 hours, several ecosystem developments have occurred. Taiko, an Ethereum Layer 2 solution, launched its new public testnet, “Hoodi.” Additionally, the ETH treasury firm Sharplink announced a partnership to launch tokenized company shares on the Ethereum network. News also surfaced of Ethereum co-founder Jeffrey Wilcke moving a significant amount of ETH, though he reportedly still holds hundreds of millions in the asset.
- Broader Market News: The crypto market downturn has been influenced by macroeconomic uncertainty, including fears of a potential U.S. government shutdown. A significant factor impacting Ethereum directly has been the substantial outflows from spot Ether ETFs, which have seen more than $250 million pulled by institutional investors, signaling waning confidence in the short term.
5. Social Media and Tweet Activity
- Social Sentiment: The overall social sentiment for Ethereum is currently bearish. The Crypto Fear & Greed Index has fallen, indicating “Fear” among market participants. Further confirming this sentiment, the long/short ratio for ETH in the futures market is at 0.95, signaling that more traders are betting on a price decrease.
- Trending Narratives: The dominant conversation on social media revolves around the break below $4,000, the massive liquidations, and the significant institutional outflows from ETFs. The accumulation by large whale wallets is a counter-narrative, with some suggesting this is a “buy the dip” opportunity.
- Key Influencers: Market analyst Michaël van de Poppe has identified the current zone between $3,800 and $4,000 as an ideal area to start accumulating positions. Analyst Ali Martinez has pointed to MVRV bands to highlight $4,840 as a critical level to reclaim for a bullish reversal, while warning of a potential drop to $2,750 if support fails.
6. Short-Term Outlook & Forecast
Based on the available data, the short-term outlook for Ethereum appears to be tilted towards the bearish side, though with potential for a relief bounce due to oversold conditions.
- Primary Bearish Scenario: If the current support level around $3,820 fails to hold, a continuation of the downtrend is likely. The next target for bears would be the $3,750 level, and a break below that could lead to a more significant correction towards the $3,626 support zone in the next 24-48 hours. The sustained institutional outflows and high liquidation levels support this scenario.
- Primary Bullish Scenario: Should the accumulation by large wallets and the oversold RSI readings trigger a reversal, Ethereum would need to reclaim the $4,000 level decisively. A sustained move above $4,050 could invalidate the immediate bearish pressure and open the door for a retest of resistance at $4,120.
This analysis is for informational purposes only and does not constitute financial advice.
