Ethereum Price Forecast - ETH-USD Falls to $3,940 After $115M Inflows, $10K Breakout Still ‘Loading’

Ethereum (ETH-USD) Falls 8% to $3,940 as $115M in Longs Liquidated but $10,000 Target Still in Sight

ETH-USD Extends Pullback After $4,300 Reversal, Long Liquidations Surge Above $115 Million

Ethereum (ETH-USD) extended its correction on Tuesday, slipping 8% to $3,940 after failing to hold resistance above $4,300, triggering a wave of forced liquidations across derivatives markets. The sharp decline erased nearly $650 million in leveraged crypto positions, with $455 million coming from long trades, according to CoinGlass data. Within that total, Ethereum alone saw $114.5 million in long liquidations, including a single $5.5 million position closed on the OKX exchange—one of the largest crypto liquidations of the month. Despite the pressure, traders note strong institutional bids building beneath the surface, with $743 million in buy orders clustered between $3,670 and $3,800, suggesting downside momentum may stall before a deeper breakdown occurs.

The latest drop came as volatility returned to the broader crypto market following Trump’s renewed tariff escalation against China, sparking global risk aversion and draining liquidity from high-beta digital assets. The synchronized selloff across Bitcoin, Ethereum, and altcoins has forced a broad deleveraging cycle, but traders remain divided over whether this is the end of Ethereum’s advance or merely a technical reset in its multi-month rally that began below $3,000.

Key Support at $3,800 Defines the Battle for the Next Trend Phase

Technical analysts argue that Ethereum’s current consolidation is not a sign of breakdown but rather a retest of structural support within a broader bull cycle. The weekly chart still shows ETH trading inside a bull flag pattern, a continuation setup that historically precedes large upward expansions. The lower edge of the flag—currently near $3,870—is being retested as key support, while the upper boundary around $4,440 remains the breakout threshold for a potential move toward the $10,050 technical target, a gain of roughly 164% from current levels.

The RSI has eased to 54 from 74, reflecting cooling momentum after months of overextension but leaving room for another leg higher if price holds above $3,800. Analysts warn that a daily close below that level could open the path toward $3,700, aligning with the 20-week SMA, and further down to $3,500—a region that saw heavy accumulation earlier this year.

Market technicians such as Michael van de Poppe maintain a bullish bias, noting that the ETH/BTC pair has stabilized around 0.032, calling it an “ideal accumulation zone.” Similarly, Daan Crypto Trades highlights the need for ETH/BTC to reclaim 0.041 to confirm a sustained trend reversal against Bitcoin. Despite the correction, these pair dynamics indicate Ethereum’s relative resilience compared to smaller-cap altcoins.

Institutional Accumulation and Futures Positioning Support the Recovery Case

Data from derivatives markets shows institutional positioning remains constructive despite the liquidations. Funding rates across major exchanges have flipped mildly negative, implying traders are paying to hold shorts—often a sign of an oversold setup. On-chain data confirms renewed inflows into large wallets, suggesting whales are taking advantage of the dip. Exchange outflows totaling $171 million on October 13, primarily from Coinbase and Binance, signal that major investors are moving ETH to cold storage, reducing sell pressure.

Grayscale, BitMine Immersion Technologies, and several DeFi funds have also increased exposure, contributing to Ethereum’s steady institutional footprint. This coincides with the upcoming Fusaka upgrade, expected to enhance scalability and fee efficiency by year-end, strengthening Ethereum’s long-term investment narrative.

Macro Headwinds and Trump’s Tariff Shock Hit Crypto Liquidity

Ethereum’s selloff cannot be separated from the global macro backdrop. Trump’s 100% tariff announcement on Chinese goods reignited fears of a global trade slowdown, driving traders out of risk assets. The U.S. Dollar Index (DXY) remains near 99.20, supported by safe-haven flows, while gold (XAU/USD) surged to a record $4,190 per ounce. This risk-off rotation drained speculative liquidity from the crypto sector, with leveraged positions across major tokens collapsing. Bitcoin dropped from $126,000 to near $111,000, wiping out more than $500 billion in crypto market capitalization within a few days.

While macro headwinds persist, Ethereum’s resilience relative to other tokens underscores investor conviction in its role as the foundation of decentralized finance and smart contract infrastructure. Futures open interest recovered quickly after Friday’s flash crash, and ETH’s 24-hour volume of $58.9 billion highlights strong two-way participation, signaling that market liquidity remains robust even in heightened volatility.

Technicals Reinforce Bullish Structure Despite Short-Term Pain

Ethereum’s chart remains technically constructive despite the steep retracement. The 200-day moving average, currently near $3,850, continues to act as a structural floor, with every dip into that zone met by aggressive spot buying. Above, the $4,500–$5,000 resistance corridor remains the key pivot for trend confirmation. A decisive daily close above $4,440 would validate the bull flag and likely accelerate momentum toward $5,000, followed by Fibonacci extensions at $8,000–$10,300, aligning with projections from Titan of Crypto and Chimp of the North, who both view this correction as a precursor to a long-term breakout phase.

The On-Balance Volume (OBV) indicator remains elevated at 12.66 million, signaling sustained accumulation despite price volatility. The alignment of the 20-day EMA above the 50-, 100-, and 200-day EMAs confirms an intact medium-term uptrend, even as short-term oscillators reset.

Ethereum’s Market Position and “Flippening” Debate

At $3,940, Ethereum’s market capitalization stands around $495 billion, still second only to Bitcoin (BTC-USD), valued near $2.1 trillion. To surpass Bitcoin at its current valuation, ETH would need to reach approximately $20,000 per token, equivalent to a 5x increase without any rise in BTC’s market cap. Analysts dismiss the “flippening” as premature but acknowledge the narrowing technological gap, particularly as Ethereum’s deflationary model and rising institutional adoption bolster its fundamentals.

ETH’s deflationary supply mechanics—supported by consistent EIP-1559 burns—continue to reinforce scarcity. Long-term holders now control more than 78% of circulating supply, the highest level since 2018. With the ETH/BTC ratio stabilizing and whales accumulating, Ethereum remains strategically positioned to outperform once risk appetite returns.

Emerging Catalysts: ETF Demand, Fusaka Upgrade, and Layer-2 Expansion

The next leg of Ethereum’s growth hinges on three major catalysts. First, renewed inflows into spot ETH ETFs, which saw $2.7 billion in new exposure last week following a temporary pause, are expected to accelerate institutional adoption through Q4. Second, the Fusaka network upgrade—targeting transaction speed and gas optimization—will likely enhance scalability, reducing congestion across DeFi protocols. Third, the expansion of Layer-2 networks, particularly Arbitrum, Optimism, and Base, continues to boost transaction throughput while lowering fees, reinforcing Ethereum’s dominance across decentralized applications.

Ethereum’s integration into real-world tokenization projects also continues to grow. Bhutan’s adoption of Ethereum-based digital ID infrastructure marks a milestone in national-level blockchain use, signaling that the network’s real-world impact is broadening beyond financial applications.

AI-Driven Forecasts and Alternative Investment Correlations

AI-powered platforms estimate Ethereum’s short-term recovery target at $4,536, with a one-year projection around $3,100, reflecting short-term volatility but long-term resilience. Algorithmic models show Ethereum’s relative strength against macro assets such as gold and equities remains positive on a 6-month basis. The correlation between ETH and risk indices like the Nasdaq 100 has risen to 0.71, underscoring how monetary policy and tariff actions directly influence crypto performance.

Meanwhile, emerging DeFi projects like Bitcoin Hyper (HYPER) and Mutuum Finance (MUTM) are capturing speculative capital, but Ethereum remains the backbone of this ecosystem. HYPER’s presale surpassing $23.5 million reflects enthusiasm for Bitcoin Layer-2 solutions but ultimately reinforces Ethereum’s role as the benchmark for innovation.

Market Sentiment and Strategic Outlook

Despite the volatility, sentiment among professional traders remains cautiously optimistic. Funding data, whale accumulation, and ETF inflows collectively point to an ongoing reaccumulation phase rather than a structural reversal. Ethereum’s failure to hold $4,300 reflects profit-taking, not exhaustion. Analysts expect short-term sideways trading between $3,800–$4,500 before a potential upside breakout toward $5,000 once macro conditions stabilize.

As the market digests liquidations and Trump’s tariff shock, Ethereum’s network fundamentals, deflationary supply, and institutional participation continue to justify its position as the most strategically significant blockchain asset after Bitcoin.

Verdict: HOLD → Short-term neutral below $4,400, bullish bias if ETH-USD reclaims $4,500; upside potential toward $8,000–$10,000 remains intact once macro volatility cools.

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