Ethereum (ETH) extended its drawdown, this time attacking long positions accumulated under $4,000. The token broke down below support levels, fulfilling previous predictions for revisiting the $3,900 range.
Ethereum dipped under the $4,000 level after breaking previous support levels. The slide occurred during a general market drawdown, where BTC dipped to the $111,000 range.
The recent dip was once again caused by derivative trading, wiping out long liquidity. In the past 24 hours, ETH saw over $71M in long liquidations, with over $36M happening on Bybit.
The recent ETH drawdown happened despite recent signs of accumulation and growing staking. Derivative markets still have the greater influence on price action, often breaking out the general bullish trend.
Following the latest price dip, which happened during Asian trading hours, there is still liquidity in the $3,900 range. ETH has quickly bounced back above $4,000.
The market is still heavily skewed toward long liquidity, with over 75% of positions betting on a recovery. However, short liquidity is also accumulating up to $4,300, suggesting a recovery may be the next step for ETH.
Spot buying continues as whales buy the dip on ETH
The recent flushing of long positions is often viewed as a deliberate move, a mix of whale activity, aggressive traders, and large-scale market makers.
During the downturn, ETH whales were back to their usual behavior, acquiring reserves of spot ETH. The Ethereum project is still seen as key for decentralized finance and eventual mainstream adoption, hence the long-term confidence.
During the market downturn, 10 new whale wallets acquired 201K ETH, as seen by on-chain analysts.
Whales are aggressively buying $ETH now.
Today, 10 new wallets have bought 201K ETH worth $855 million from exchanges and OTC.
This often happens when ETH is getting closer to a bottom. pic.twitter.com/EUBMXE5cwZ
— ZYN (@Zynweb3) September 25, 2025
At the same time, Wintermute almost depleted its ETH reserves, retaining 5K tokens after active transfers to centralized markets and DEX.
Is ETH done with the losses?
Bearish predictions see ETH dipping as low as $3,700 before shifting its direction. For others, the $3,900 support level is the turning point, following the removal of long liquidity at that range.
ETH wiped out most of the long liquidity, causing analysts to predict a price bottom at the $3,900 range and an upcoming price recovery. | Source: Coinglass
One of the signs for the shift is the liquidation of short positions. Following the dip under $4,000, traders started attacking short positions, causing $4.5M in liquidations within an hour.
Additionally, the long liquidations showed a trading profile that suggested a short-term dumping of ETH. The biggest share of the day’s liquidations happened within the four-hour window, during Asian trading hours.
Recent wallet flows show Binance increased its stablecoin reserves to a new high, while ETH and other tokens flowed in from the Wintermute market maker. Similar transactions happened during the market downturn at the end of August.
The loss of long positions has not caused market capitulation for now. However, ETH may take weeks to rebuild liquidity and reclaim previous levels. A breakout to $4,580 is seen as a resistance level before a more confident bull market.
