ETH stands on the edge of the cliff: The $1.8 billion liquidation storm is about to break out!

Vitalik 2025-12-2 16:53 53986人围观 ETH

Recently, Ethereum (ETH) has once again become the focus of the market - not because of a technological breakthrough, but because of a liquidation tsunami that may sweep across the entire network and be as large as $1.8 billion. According to ChainCatcher

Recently, Ethereum (ETH) has once again become the focus of the market - not because of a technological breakthrough, but because of a tsunami of liquidation that may sweep across the entire network and amount to as much as $1.8 billion.

According to ChainCatcher data:

If ETH exceeds $3,148, the mainstream CEX short order liquidation volume will reach as high as $1.058 billion.
If ETH falls below $2,851, the liquidation volume of long orders will surge to $776 million.

ETH is standing in a dangerous "price sandwich". As long as one of the long and short sides breaks through, it will be a series of nuclear bomb-level liquidations.

1. On the brink of crisis: ETH price stands on the edge of the cliff

ETH is currently oscillating in a narrow range, and every time the price approaches a critical point, it feels like stepping on a broken rope.

This position not only determines the short-term rise and fall, but also detonates huge leveraged positions.

This is a typical "liquidation critical zone" market situation: once it breaks through, kill the shorts first and then the longs.

2. Liquidation mechanism: an amplifier of market fluctuations

Leveraged trading itself is not scary, what is scary is:

Liquidation is performed automatically
The exchange will not hesitate
A liquidation will drive the price further in the same direction.

This is why markets can experience wild swings around key price levels. Liquidations are not a result but an “accelerator of price movements.”

3. Historical Lessons: The Ghost of Flash Crash Events

There are several moments in ETH’s history that serve as warnings for today:

Plunge on 5·19, 2021
ETH’s cliff-like decline caused by the FTX crash in 2022
Instantaneous push-back after leverage accumulation in 2023

Before every flash crash, there is a stage of high-density accumulation of huge amounts of leverage.

The structural characteristics of current ETH are surprisingly similar.

4. Long-short duel: huge positions at key prices

The current long and short position structure is as follows:

There is a dense accumulation of short orders above, and $3148 is the “air force lifeline””
The leverage of long orders below is huge, and $2851 is the "bottom line for long orders"”

This is not ordinary support and resistance, but:

Once it is broken through, there will be tens of billions of dollars of migration, hedging, liquidation, and directional squeeze.

5. Market background: The cryptocurrency market is showing signs of fatigue

In terms of macro environment:

U.S. inflation returns, risk assets come under pressure
The AI sector attracts a lot of liquidity
Funds’ risk appetite for the crypto market continues to decline
Recent trading volume has hit record lows, reflecting a lack of market activity

Overall, this is a weak market - in a weak environment, liquidation is more likely to form a waterfall effect.

6. Operation Whale: Smart Money’s Exit Signal

Data on the chain shows:

Some early giant whales chose to reduce their positions at high prices
Institutional wallets begin transferring ETH to exchanges
Lido, CEX huge deposits and withdrawals increased significantly

Giant whales often move earlier than retail investors, which is a typical risk warning signal.

7. Technology Upgrading: The Disconnect between Network Development and Market Performance

The ETH technical roadmap continues to advance:

Danksharding
4844 upgrade
L2 ecological expansion
MEV optimization process

But the market's reaction to these positive results was muted. There is a disconnect between technology and market capitalization trends, which shows:

Funds still recognize the long-term value of ETH, but short-term sentiment is extremely unstable.

8. Broader Market Impact: The Vulnerability of Altcoins

If ETH triggers a chain reaction of liquidations, altcoins will face:

A larger proportion of the decline
Faster liquidity depletion
More violent leverage liquidation

Historical experience is: once ETH falls, altcoins cannot hold on.

9. DeFi’s Liquidation Challenge: The Fragility of the Emerging System

Risk points in the DeFi market include:

Vulnerability of NFT lending pools
Chain liquidation of flash loan arbitrage
Protocols such as Aave and Maker face sharp falls in mortgage asset prices
LST (pledged ETH) may be discounted

Since this year, DeFi’s liquidation model has not been significantly optimized, and systemic risks still exist.

10. Investor Strategy: The Difficult Choice Between Long and Short

In this critical area of structural risk, the strategy should be more conservative:

If long:

control lever
Don’t fill the position at key positions
Make a stop loss

If short:

Note that the liquidation zone may trigger an "empty stampede"”
Don’t bet on a retracement after an instant breakthrough

If you are a stable investor:

Temporarily avoid chasing the rise and killing the fall
Hold the currency and wait and see, waiting for the direction to be clear
Pay attention to the behavior of giant whales on the chain as a reference indicator

11. Future Outlook: Market Reconstruction after the Storm

Regardless of whether this round of ETH ends up breaking upward or downward, these structural risks will be released sooner or later.
After liquidation is completed, the market often welcomes:

A healthier price structure
More realistic buying orders
Clearer trend direction

For investors who want to invest in long-term ETH, the storm may be a real window of opportunity.

Summarize

ETH is currently in a "compressed spring" key range, and the leverage accumulation on both the long and short sides has reached dangerous levels.
Once it breaks through, it will not be an ordinary market, but a chain reaction of hundreds of millions of funds.

The market has given a signal. Next, it depends on whether ETH chooses to go up or down.

I recommend a book of wisdom, "Poor Charlie's Almanac".This is the other side of Dollar. Thank you for your attention and likes. You are also welcome to click a little red heart "❤️" to recommend.