While talks of a new ATH for Ethereum (ETH) have begun and are only one step away, data from the US has upset the bullish picture.
Ethereum, which rose to $4,780, fell to $4,280 with an unexpected sharp decline.
While this decline wiped out billions of dollars worth of long positions, analysts believe the danger in ETH is not over yet.
At this point, Mechanism Capital founder Andrew Kang predicted that long position liquidations could reach up to $5 billion if the Ethereum price continues to fall.
Sharing from his X account, Kang stated that long liquidations in Ethereum could reach up to $5 billion in the coming period.
Kang warned that if this happens, the ETH price could drop to $3,200 or $3,600.
“We estimate that ETH liquidations on exchanges will reach $5 billion. This lowers our estimate to $3.2k-$3.6k.”
As Ethereum and the cryptocurrency market in general experience a downturn, analysts are pointing to $4,000 as a critical support level for ETH. If Ethereum holds above this level, stability could return. However, if this critical support level is broken, ETH and the market could face one of the largest liquidation waves of the year.
*This is not investment advice.