In the last 36 hours, the crypto market experienced its most intense deleveraging since 2021, as nearly $3 billion was liquidated across major assets.

Ethereum (ETH) led the sell-off after recording roughly $900 million in liquidations, and even surpassed Bitcoin for the first time in months.

Ethereum Suffers Liquidation Shock

In its latest update, data analytics platform Alphractal pointed to the 24-hour Liquidations-to-Open Interest ratio as a crucial indicator, highlighting which assets are facing the heaviest pressure.

It found that top-tier tokens like Bitcoin (BTC) and Ethereum have not yet seen a full-scale deleveraging. However, mid- to lower-cap altcoins, ranging from the Top 10 to the Top 700, have taken the hardest hit, wiping out leveraged positions and driving market volatility higher.

All eyes are on whether Ethereums current losses mark the start of broader liquidations, as Bitcoin and other large-cap coins may still face further downside. Alphractal CEO Joao Wedson also revealed that despite the bearishness, especially in ETH, he believes the recent wave of long liquidations could act as a catalyst to re-ignite market momentum.

ETH has been following the reaccumulation phase I warned about back in August. We went short exactly at the last ATH, and the position is still open. I still believe that the latest long liquidations will re-ignite the market for a bullish October even if many traders are still unsure.

On the institutional side of things, Ethereum attracted a strong $772 million inflow last week. Such activity could provide crucial support for its price as investor sentiment improves. The surge came alongside the US Federal Reserves long-anticipated rate cut, which initially sparked caution but later fueled renewed confidence in digital assets.

Correction Now, $10,000 Later

Meanwhile, crypto analyst Ted Pillows predicted that Ethereum will eventually climb above $10,000 this cycle, but not before a significant correction plays out. In his latest update on X, Pillows warned that the market is currently in the midst of that pullback and sees ETH potentially dropping to the $3,600-$3,800 range before finding a bottom.

According to the analyst, this dip would set the stage for a strong reversal and a push toward a new all-time high once the correction is complete.