Unprecedented Liquidation Rocks Crypto Market, Ethereum (ETH) Stands Out Amid Turmoil

The cryptocurrency industry faced its most chaotic liquidation event to date, triggering widespread upheaval across the digital asset market. Despite the turbulence, Ethereum (ETH) displayed remarkable resilience compared to other cryptocurrencies, maintaining its position as a key player in the industry.

Historic Liquidation Event Reshapes the Market

In an astonishing turn of events, the digital asset market saw liquidations totaling $19.3 billion (approximately 27 trillion won) within just 24 hours, as reported by Coinglass on the 11th (local time). This event affected nearly one million traders and has been dubbed the largest liquidation event in cryptocurrency history.

Ethereum was not spared from a significant price drop, falling sharply from $4,300 to $3,510 — representing an 18% decline. However, the asset rebounded to recover to the $3,780 range. Analysts believe this recovery was facilitated by technical support from the 200-day exponential moving average (EMA), which provided a floor amid the aggressive selloff.

In stark contrast, altcoins bore the brunt of the market chaos, with some experiencing shocking declines of over 95% in a single day. Market commentator Sassal described the situation, stating, "Bitcoin and Ethereum managed to display relative stability, but many altcoins saw unprecedented drops of 70% to 95%. These movements go far beyond what is typically seen in the market."

Ethereum (ETH): Potential Recovery Despite Persistent Pressure

Despite the market’s turmoil, Ethereum has shown signs of potential recovery. Market research firm Fundstrat projected that if the asset successfully establishes a temporary bottom following the recent drop, ETH could climb to $5,550 in the medium term.

However, this optimism is tempered by continued selling pressure. Ethereum’s Relative Strength Index (RSI), a key technical indicator, hovers at 35. This figure indicates that the asset is nearing oversold territory, which could signal a potential reversal.

Another factor complicating Ethereum’s recovery is the exchange inflow mean, which has surged to 79 — the highest level seen this year. Elevated exchange inflows typically suggest an increase in short-term selloffs as traders move their ETH holdings to exchanges to liquidate positions.

Adding to the pressure, the Ethereum staking queue has recorded withdrawals amounting to massive sums totaling $10 billion (roughly 14 trillion won). However, blockchain analytics firm Nansen emphasized that these large-scale withdrawals are not inherently indicative of imminent selloffs. Many validators appear to be reallocating funds to meet short-term liquidity needs rather than completely exiting their positions.

Analysis: Rebound Still a Possibility

Despite the current challenges, some market analysts remain cautiously optimistic about Ethereum’s recovery potential. They argue that as ETH approaches oversold conditions, the possibility of a technical bounce-back increases, which could help stabilize the market and restore investor confidence.

Analysts have further remarked, "If Ethereum successfully stages a recovery from this near-oversold phase, it could encourage broader stabilization across the cryptocurrency ecosystem, even amidst ongoing adversities."

Macroeconomic Factors Weigh on Cryptocurrency Market

This unparalleled liquidation event did not occur in a vacuum. The market’s volatility has been compounded by escalating geopolitical and macroeconomic concerns, particularly the deepening U.S.-China trade conflict. The prolonged nature of this trade stalemate has weighed heavily on global investment sentiment, fueling uncertainty across financial markets.

Describing the selloff, industry experts have called it "the fastest and most severe liquidation event in the history of digital assets." It underscores the fragility of the crypto market when subjected to external economic pressures, even as leading digital assets like Ethereum manage to withstand much of the turbulence.

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