Ethereum's price dropped sharply by 4% following a liquidation event that occurred after hitting a record high of $4,950. This event caused significant liquidation and shook the market.
Ethereum Price Drop
Ethereum faced a sharp price decline of 4% following a liquidity event that took place on August 24, 2025, after the price reached a record high of $4,950. This event led to widespread liquidations, raising concerns among investors about possible further market corrections.
Role of Institutional Whales
Institutional whales and accumulators on Binance played a key role in this event, with a total accumulation of over $1.6 billion in Ethereum positions. Analyst Lennaert Snyder remarked, "Ethereum took liquidity above $4,880 and flushed leveraged longs… currently testing ~$4,500 support, but it doesn’t look strong."
Market Outlook and Risks
The market faced immediate impacts in terms of liquidations, with $720 million in positions cleared. Ethereum's current support levels suggest potential further downside if critical support fails. The financial sectors witnessed high volatility, but regulatory bodies such as the SEC or CFTC have not issued statements. The absence of guidance from Ethereum leadership adds to market unpredictability.
Historically, similar liquidity events have led to large buy-ins during volatile periods; however, analysts caution about the potential for further price declines. The market awaits further signals from on-chain activity.
