Is Ethereum (ETH) Headed for a $2,200 Meltdown? Traders Brace for Deeper Correction

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• Ether drops 16% to retest $3,000, erasing year-to-date gains.
  
• Over $1.7B in leveraged crypto positions liquidated, $485M in ETH longs.
  
• Bears target $2,380; bulls must defend $2,800–$3,000 for recovery.

Ether (ETH) tumbled sharply on Tuesday, revisiting the $3,000 mark for the first time since mid-July. The top altcoin fell as much as 16% to $3,050 before bouncing back to around $3,300, effectively wiping out its year-to-date gains. The recent sell-off has intensified concerns for traders and investors, with over $1.7 billion in leveraged crypto positions liquidated in the past 24 hours.

Liquidations Shake the Market

Data from CoinGlass shows that long Ether positions accounted for nearly $485 million of the recent liquidations, highlighting the severity of the sell-off. The largest single liquidation hit $26 million on the Hyperliquid decentralized exchange. These figures echo previous major events, such as the $500 million wipeout on August 1 and the $955 million liquidation on September 22, which triggered sharp price drops in both cases.

The cascading effect of these liquidations has contributed to Ether’s ongoing drawdown from its August all-time high of $4,955, marking a 33% decline in just over two months.

Technical Outlook: Bearish Pennant and Key Support

Technically, ETH/USD has formed a bearish pennant on lower time frames—a continuation pattern signaling further downward potential. Ether is currently testing the pennant’s lower boundary near $3,300. A break below this level could open the path for a deeper decline toward the pattern’s target around $2,380, representing a 29% drop from current prices.

However, the relative strength index (RSI) has climbed from extreme oversold levels of 18 to 33, suggesting a short-term recovery could persist as dip buyers step in. Analysts indicate that maintaining support in the $2,800–$3,000 range is critical for bulls to defend against a deeper correction.

Also Read: Ethereum Whales Accumulate as Supply Drops, Eyeing $6.5K Rally

Bulls vs. Bears: Key Levels to Watch

Analyst Don Laguzzi notes that Ether’s weekly chart shows a potential W pattern—a bullish continuation setup—anchored by the $3,000 neckline. A decisive daily close above $3,400 could shift momentum back to the bulls, targeting the 50-day SMA at $3,700 and potentially $4,000. Conversely, a break below $2,750 may invalidate the bullish setup and open the door to declines toward $2,200 or lower.

Ether’s recent tumble highlights both market volatility and the importance of key psychological levels. With $3,000 acting as a critical support, traders will closely monitor whether bulls can defend this zone or if bears will push ETH toward deeper losses.

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.