Ethereum rate in dangers: chaos threatens in further drop

The course of Ethereum (ETH), the second largest crypto coin, has today fallen to $ 4,260. That is almost 5 percent lower than a day earlier. Traders follow the limit of $ 4,200 closely, because a decrease below can lead to large forced selling. That can put extra pressure on the market and ensure new fluctuations. The question is whether ETH knows how to hold this limit or ends up in a downward spiral.

Analyst predicts up to 5 billion dollars liquidations

According to Data from Hyperdash, there are more than 56,000 Ether positions at the Decentralized Stock Exchange Hyperliquid, with a value of around 236 million dollars. They are in danger if the race drops to $ 4,170. There are also great risks around $ 3,940 and between $ 2,150 and $ 2,160.

When investors suffer too much loss on their efforts, the stock market automatically closes their position. This happens to prevent larger losses and to make sure that lent money is returning. Such forced sales often cause extra pressure on the market, so that the price can fall even further.

Andrew Kang, founder of investment fund Mechanism Capital, expects this scenario to become reality. “I estimate that we are about to see $ 5 billion at Ethereum liquidations at different fairs.” That can bring the race to $ 3,200 to $ 3,600, “he wrote on X.

Such a massive sale can cause a domino effect. If large positions are closed, the course drops further and other investors also get into trouble. This leads to even more sales, making the movement stronger and stronger.

$ 4,200 forms a crucial border for Ethereum

Despite the current worries, the Dutch analyst Cryptojelle also sees a bright spot. According to him, Ether is now against a resistance to just below the All Time High. According to him, if that barrier is broken, there is “free play” for new records and ETH can enter unknown terrain.

For the time being, the limit of $ 4,200 seems decisive. If Ethereum drops under that, a chain reaction of forced sales can lower the coin a lot. In the coming days it will become clear whether ETH knows how to defend this level or whether Kang’s predictions are getting closer.