2025 is approaching one of the most important years for Ethereum. A fall below $3,000 is increasingly likely as the asset teeters on the brink of an even harsher correction following last week’s violent liquidation event across cryptocurrencies.
Further decline in Ethereum?
Markets were hurt after Friday's selloff. According to market data, more than $1.02 billion was liquidated in just one day, wiping out around 310,000 traders. Ethereum alone has generated over $269 million in forced positions, making it the second-largest amount after Bitcoin. Although the overleverage was successfully eliminated, this event also destroyed the short-term market structure, leaving ETH susceptible to further declines.
From a technical perspective, Ethereum is clearly underpowered. Although it failed to break above $4,200, the asset underwent a significant reversal and is currently trading around $3,730, below its 100-day moving average for the first time in months. The next important dynamic support is the 200-day moving average, which has held at $3,500 so far. If that fails, ETH could fall into an extended downtrend and the next reasonable target would be $3,000.
Ethereum’s temporary reversal
The RSI has fallen below 40, which clearly shows strong bearish momentum and little buying interest. This trend is further supported by volume. The most recent candlestick shows a sell-side advantage, indicating that financial institutions and whales may be mitigating risk in anticipation of future volatility. This change in sentiment was brought about by Friday's selloff.
The rejection of Bitcoin at $120,000 set off a chain reaction that shook the altcoin market. According to liquidation data, there was a particular concentration of leveraged long positions in Ethereum, which further exacerbated the collapse. There may be a brief respite if ETH rises above $3,500, but the market tone remains defensive.
Ethereum is likely to break above $3,000, a level that could redefine the medium-term trend unless buying power returns soon. In other words, the recent meltdown may be more than a temporary correction, and the Ethereum bull market has stalled. If sentiment does not change soon, a decline towards $3,000 or even lower seems inevitable.
