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Key Takeaways:
- ETH dropped to $3,600 after Trump’s tariff announcement triggered market-wide sell pressure.
- $115.8M in long liquidations hit retail traders hardest, while whales stayed cautious.
- ETH funding turned negative — a potential bullish signal as price eyes $3,775 reclaim.
Ethereum (ETH) has once again been rejected near the $4,000 mark, retreating to $3,600 despite favorable on-chain and institutional metrics. The move has caught many bullish traders off guard, especially after a 19-day inflow streak into spot Ethereum ETFs and the $10.16 billion strategic ETH reserve appeared poised to propel the altcoin higher.
— Cointelegraph Markets & Research (@CointelegraphMT) July 31, 2025
Trump Tariffs Spark Broader Sell-Off
The market downturn coincided with U.S. presidential candidate Donald Trump’s announcement of new tariffs on July 31 targeting Canada, Taiwan, South Korea, and other key trade partners. Bitcoin immediately dropped in response, dragging ETH down with it. Ethereum touched a leveraged liquidation zone around $3,600, triggering over $115.8 million in long liquidations within five hours, according to Hyblock data.
Retail Traders Take the Hit
A granular breakdown of ETH’s cumulative volume delta shows that the long liquidation cascade was largely absorbed by retail investors, with smaller trade buckets (100–1,000 ETH) suffering the most. Indicators from Hyblock and TRDR.io confirmed that retail traders were net long while whales stayed relatively cautious.
This disparity explains why retail sentiment has turned defensive despite broader optimism around Ethereum’s fundamentals, such as ETF holdings now totaling $21.85 billion.
Also Read: The Ether Machine Buys $56.9M in ETH, Surpasses Ethereum Foundation in Holdings
Funding Turns Negative — Buy Signal?
One bullish glimmer lies in Ethereum’s aggregated funding rate, which flipped negative for the first time since June 25. Historically, negative funding has served as a contrarian buy signal for ETH and BTC alike. As retail bulls attempt to “buy the dip,” ETH is showing signs of recovery and could soon reclaim the point of control at $3,775.
Ethereum’s price struggles highlight the complex interplay between macroeconomic news, liquidation dynamics, and investor sentiment. While ETF inflows and reserves remain bullish signals, short-term volatility and retail-driven liquidations continue to weigh heavily. Until ETH clears the $4,000 resistance decisively, traders should brace for more turbulence.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
