Ether Retests $2,800 Support as Crypto Market Wipes $1B in Liquidations

The sell-off was not isolated to digital assets. On Thursday, global markets experienced a sharp, synchronized decline, with stocks, cryptocurrencies, and precious metals collectively shedding over $3 trillion in market value in just a few hours. This widespread correction, fueled by geopolitical tensions and macroeconomic uncertainty, swiftly eroded the risk appetite that had fueled the crypto market’s early January momentum.

Within this turmoil, Ethereum, the second-largest cryptocurrency by market cap, retraced 6.9% on the daily timeframe. According to Binance market data, ETH fell below the crucial $2,800 level in the morning, briefly bouncing before sinking to a one-month low of $2,773. The leading cryptocurrency, Bitcoin (BTC), followed suit with a 6.2% decline, reaching a two-month low of $83,934. This action effectively erased all intraweek gains for the broader crypto market, highlighting its continued sensitivity to traditional market shocks.

The violent price moves triggered a massive wave of liquidations across leveraged crypto positions. Data from CoinGlass reveals that total liquidations over 24 hours surged to $917.17 million at the time of writing, rapidly approaching the $1 billion mark. During this period, 223,915 traders saw their positions forcibly closed.

The liquidation event accelerated dramatically as the day progressed. More than half of the total—over $620 million—occurred in just the four hours leading up to the report. Bitcoin positions accounted for the lion’s share of the pain, contributing $422 million to the total, while Ethereum positions saw $160 million liquidated. The scale was underscored by a single massive liquidation order on the Hyperliquid exchange valued at $31.64 million, demonstrating the extreme volatility and risk present in the derivatives market during such corrections.

Amid the market correction, analysts focused on Ethereum’s persistent trading pattern. Sjuul from AltCryptoGems highlighted that ETH has been hovering in a ‘seemingly endless range’ between $2,600 and $3,350 on the daily chart for the past two months. The analyst suggested there is no clear trend, advising investors to wait for a proper breakout above $3,350 or a breakdown below $2,600 before drawing significant conclusions about the market’s direction.

This view of range-bound equilibrium was echoed and expanded upon by trader EliZ. He asserted that ETH’s macro perspective shows neither real strength nor weakness, but rather ‘an enormous, forced equilibrium’ on longer timeframes. EliZ pointed out that ETH ‘continues to move within well-defined boxes, above and below the same levels for months/years, without ever building a directionality that can be described as structural.’

Based on this analysis, EliZ concluded that short-term price efforts, like the plunge to $2,773, do not signal a ‘change of regime,’ but merely ‘liquidity rotation.’ He characterized the current state as a ‘macro stalemate, where the market decides not to decide.’ His final caution was stark: until a clean and sustained breakout or breakdown from the established range occurs, ‘any strong narrative is just storytelling.’ As of the latest data, Ethereum was trading at $2,798, reflecting a 5.3% decline on the weekly timeframe, firmly within the analyst-identified range.