Ethereum (ETH) fell 8% on Tuesday to trade around $3,940, erasing Monday’s gains and triggering $115 million in long liquidations. The sharp pullback hit traders across major exchanges, though analysts maintain that the current correction could set the stage for a new leg upward, potentially toward $10,000, if support at $3,800 holds.
According to CoinGlass data, total crypto liquidations exceeded $650 million in the past 24 hours, with ETH accounting for roughly $114.5 million. The largest single liquidation occurred on OKX, involving an ETH/USD pair worth $5.5 million. Analysts say that despite the wipeout, significant buying interest sits below $3,800, suggesting a possible local bottom.
Technical indicators still point to a bullish structure. On the weekly chart, ETH continues to trade inside a “bull flag”, a continuation pattern that could propel prices toward $10,050 if confirmed. However, the RSI has dropped from 74 to 54 over the past seven weeks, signaling waning momentum. A daily close below $3,800 could expose ETH to deeper support levels near $3,500.
Michael van de Poppe, CIO & Founder MN Fund and MN Capital, maintain that ETH remains in a consolidation phase. Van de Poppe called the ETH/BTC ratio “an ideal buy zone” at 0.032.
Meanwhile, technical analyst Titan of Crypto said that a multi-year RSI breakout indicates that “a massive move is loading.”
Leverage rises again as ETH rebounds
Recent data shows that open interest on ETH futures has surged 8.2% in 24 hours, signaling renewed speculative leverage even as spot inflows remain muted. Analysts warn that this “revenge trading” pattern, where traders attempt to recover losses quickly, often precedes short-lived rallies.
CryptoQuant analyst Maartunn noted that roughly three-quarters of such leverage-driven rebounds historically fail to sustain. “Looks like some of you are trying to trade your money back,” he posted on X, cautioning that funding rates and liquidation clusters remain elevated.
Ethereum’s structural test
The sharp correction and subsequent leveraged bounce highlight a recurring theme in Ethereum’s market cycles, resilience paired with risk. While long-term technicals suggest a bullish trajectory, excessive leverage threatens to distort organic price discovery.
This dynamic echoes the volatility that has followed Ethereum’s recent market recovery, where speculative futures activity often amplifies short-term swings.
The network’s fundamentals remain strong, but as open interest climbs and retail positioning grows aggressive, the path to a sustained $10,000 ETH may depend less on momentum and more on stability.
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