Ethereum in Crisis — The Chain Reaction Revealed by the Super-Liquid Market and the Whale Dilemma

Market Turns Sharp, Short-Term Trends Full of Variables

Ethereum’s recent performance has caught market participants off guard. After the price broke below the key support level of $3400, the overall market sentiment experienced a subtle yet profound change. As of the latest quote, ETH is trading around $3030, down more than 5% in the past 24 hours. This wave of decline has not only impacted spot holders but also triggered a series of chain reactions in the derivatives market.

In just six days, Ethereum shifted from a stable trend into a slow downward channel, during which it briefly touched lows near $2800. On the technical side, the Stochastic RSI( has entered oversold territory, currently hovering around 17, fully reflecting the intense selling pressure in the market.

The Dilemma of Super-Liquid Markets’ Whales: $54 Million Unrealized Losses

The most notable story involves a large Ethereum whale on a major trading platform. This whale entered aggressively during the recovery phase in April, accumulating nearly $700 million in long positions, once being the platform’s largest ETH long holder. At that time, unrealized profits reached approximately $119.6 million, with great optimism.

However, as prices declined, the situation rapidly reversed. When ETH fell below $3000, the unrealized losses on this massive position ballooned to $54 million. Surprisingly, despite the staggering loss figure, the whale has not chosen to close the position. Its liquidation price is estimated around $2082, leaving a relatively ample risk buffer. Whether this reflects confidence or stubbornness, only the involved party knows for sure.

Derivatives Market Collapse: Liquidation Wave Erupts

The losses of a single whale are just the tip of the iceberg. According to data from a derivatives platform, Ethereum derivatives trading volume surged by 53.5% in the short term, reaching $87.15 billion. More alarmingly, open interest plummeted by over 55%, down to $37.67 billion. This combination of rising trading volume and decreasing open interest typically signals large-scale forced liquidations.

The scale of liquidation exceeded expectations. On December 15 alone, liquidations reached $196 million, with an additional $58 million the next day. The most severe impact was on longs, with total long liquidations exceeding $213 million during that period. Traders are not adding to their bets but fleeing in panic. Each liquidation further intensifies selling pressure, creating a vicious cycle.

On-chain data also exposes the plight of some aggressive traders. A trader holding 25x long contracts experienced their tenth liquidation in recent weeks. Since the market turned in October, this account has been liquidated over 200 times, with losses surpassing $22.9 million. The account balance has shrunk to around $53,000, and every rebound becomes an opportunity for liquidation.

Technical Warning: Short-Term Support and Resistance Battles

Price movements reflect a torn market sentiment. If liquidations-driven selling continues, Ethereum’s price could further decline toward $2700, a level that previously supported price rebounds. Once this line is broken, the next support level may be even further away.

Any hope for a rebound depends on whether bulls can firmly reclaim the psychological barrier of $3000. Before that, upside space is quite limited, with resistance densely clustered around $3436. The market is still digesting the residual effects of leverage losses. Behind the cold data of the super-liquid market are countless traders making different choices.