Ethereum’s native token, ETH, has wrestled with renewed selling pressure this week, slipping below key levels after a broad market unwind. A surge of liquidations across derivatives desks has trimmed nearly 9% off ETH’s value in the past seven days, dragging the pair ever closer to the psychological $4,000 mark.
Escalating Sell-Off and Liquidations
The latest downswing was fueled by heavy margin calls on leveraged positions, where long bets were abruptly closed out as spot prices sank. Over $200 million in ETH futures were liquidated in a single session, amplifying volatility and deepening the pullback. Short-term traders are now bracing for a test of $4,100, having already lost the $4,200 support zone late last week.
looming Supply Overhang
Adding to bearish sentiment is an impending unlock of roughly $4 billion worth of ETH currently locked in smart contracts and staking pools. Large addresses hold a sizable portion of these tokens, and analysts warn that even a modest distribution to exchanges could tilt the balance toward sellers. On-chain data shows whale wallets accumulating since the summer rally, now poised to realize profits or cut their losses.
Technical Roadmap and Key Levels
From a technical perspective, the steep decline has pushed ETH’s Relative Strength Index (RSI) into oversold territory on the daily chart, hinting at a potential relief bounce. However, moving averages are converging overhead, with the 50-day EMA near $4,250 and the 100-day EMA at $4,300 acting as stiff hurdles. A clean break below $4,000 could pave the way for a retest of $3,800, where bids previously emerged in mid-June.
Outlook and Market Sentiment
Trader sentiment has flipped cautious, with funding rates on perpetual swaps dipping into negative territory as short positions outnumber longs. While network fundamentals—such as steady burn rates from EIP-1559 and rising staking participation—remain constructive, macro headwinds like central bank tightening and equity volatility could keep a lid on any sustained ETH rebound. Market participants will be watching whether institutional buyers step in around $3,800 or if the supply overhang triggers deeper losses into the summer.