Ethereum Price Retreats to $4,320 After $4,795 Rejection as $870M Liquidations Mount

Ethereum (ETH-USD) Volatility Deepens as $4,800 Rejection Sparks Heavy Liquidations

ETH-USD Faces a Sharp Reversal From Multi-Month Highs

Ethereum’s latest rally, which only a week ago had the token trading near $4,795, has been sharply unwound with prices now pinned near $4,320. That represents a 10.6% drawdown from this month’s peak, with ETH shedding more than 5% in just 24 hours. The selling has been violent, driven largely by overleveraged longs getting flushed out of the market. Data from Coinglass shows that in the past day alone, more than $870 million worth of crypto positions were liquidated, of which $210.6 million came directly from Ethereum. This level of liquidation nearly doubled Bitcoin’s (BTC-USD) at just under $120 million, showing how crowded and vulnerable ETH positioning had become on the way up. The cascade lower triggered stop-losses, created forced sales, and accelerated downside momentum.

ETF Outflows and Institutional Profit-Taking Pressure ETH

The second major headwind came from U.S.-listed spot Ethereum ETFs. After weeks of record inflows, including a single-day $1.02 billion surge on August 11, momentum flipped. Five issuers posted heavy outflows last week, including a single withdrawal north of $272 million, showing investors were locking in gains after ETH’s sprint toward $4,800. BlackRock’s ETHA, the largest of the group, still dominates with 3.49 million ETH held — about 58% of total ETF balances — but even this powerhouse saw outflows as traders took profits. Combined with retail selling, exchange data confirms that ETH balances on centralized exchanges dropped to just 14.88 million ETH, a 9-year low. That signals accumulation and long-term storage, but in the short run, it also thins liquidity and amplifies swings when outflows hit.

Technical Breakdown Points to Fragile Supports

From a chart perspective, ETH is at a crossroads. The daily structure shows clear rejection at $4,800, forming what technicians describe as a double-top near resistance. Ethereum is now fighting to hold the $4,100–$4,200 demand zone, a region that aligns with its 20-day EMA at $4,134. Losing this area opens the door to a retest of $3,650–$3,750, which aligns with the 50-day EMA and a major consolidation base. RSI has cooled to 58, down from overbought 70, reflecting fading bullish momentum. On intraday charts, ETH has formed a corrective channel with resistance at $4,450–$4,550. A clean breakout above $4,500 would signal recovery toward the $4,800 barrier, but repeated failure could extend the correction deeper.

Market Sentiment: Fear Returns After Greed

Investor psychology is shifting rapidly. After registering “extreme greed” readings in June and July, Ethereum’s sentiment index has slumped below 2.0, which historically reflects fear among retail traders. In prior cycles, such conditions acted as contrarian signals for accumulation phases, particularly when long-term fundamentals remained intact. Glassnode’s heatmap shows 341,000 ETH accumulated between $4,000 and $4,150, suggesting whales and institutional buyers may defend that zone. Meanwhile, leveraged liquidation clusters sit below $3,800, which could attract ETH in a “liquidity grab” before staging a new advance.

Macro Headwinds Add to Selling Pressure

Ethereum’s reversal has not happened in isolation. Bitcoin trades near $115,700, down more than 2%, while Solana (SOL-USD) has lost 6.3%, and XRP (XRP-USD) dropped nearly 4%. The broader crypto weakness comes as markets brace for Federal Reserve Chair Jerome Powell’s speech this week at Jackson Hole. With Fed funds still elevated, rate cut timing remains uncertain. For an asset like Ethereum — now boasting a $546 billion market cap and $26 billion in daily trading volume — macro uncertainty directly translates into volatility. Elevated financing costs across global markets limit speculative appetite, making crypto especially vulnerable to profit-taking.

Corporate Staking and Treasury Strategies Reshape ETH Supply

One overlooked factor is the structural supply squeeze from staking and corporate treasuries. SharpLink, backed by Ethereum co-founder Joe Lubin, has begun systematically accumulating and staking ETH at scale. This institutional lockup removes circulating supply, increasing price sensitivity to ETF flows and leveraged positioning. Already, 69 corporate treasuries hold $17.3 billion in ETH, about 3.4% of supply, according to CoinShares data. While this long-term accumulation is bullish, it magnifies short-term fragility — as less float means ETF outflows or liquidation cascades hit harder.

Highest Weekly Close in Four Years Keeps Bulls Hopeful

Despite the selloff, ETH posted its highest weekly close since 2021 at $4,475 on August 13, a significant milestone. That weekly strength was powered by ETF inflows, record 1.74 million daily transactions on the Ethereum network, and DeFi plus stablecoin activity that pushed July transactions past 46.6 million. Analysts argue that as long as ETH holds above $4,150 on weekly closes, the broader bull market remains intact. A decisive close above $4,550 could unlock fresh highs toward $5,000–$5,800, while dips into $4,000–$4,100 should be treated as consolidations rather than breakdowns.

Investor Positioning: Bulls Eye $5,000, Bears Target $3,800

The battleground is clearly defined. Bulls point to exchange balances at 9-year lows, ETF-driven demand led by BlackRock, and corporate treasuries staking aggressively. Bears counter with $870 million in daily liquidations, ETF outflows, and an RSI rollover signaling momentum loss. Immediate resistance sits at $4,380–$4,450, then $4,500. Support is anchored at $4,200, then $4,000. Below that, $3,800 becomes the magnet. The bias is still bullish as long as ETH defends $4,150 on a weekly basis, but until $4,500 is reclaimed convincingly, volatility will dominate.

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