Ethereums latest liquidation event may look similar on the surface to Augusts flush-out, but the underlying market pattern tells a very different story.

Data suggest that the previous wipeout reset leverage in a buyer-controlled uptrend, while this weeks crash unfolded in a seller-dominated, bearish setup.

Ethereum Flashback? Not Quite

In the past two months, the network has witnessed only two major long liquidations above $400 million.

On August 14, Ethereums $444 million in long liquidations came amid a buyer-dominated environment. Open interest stood at $29 billion, and funding rates were positive at +0.013. This indicated aggressive long positioning and high leverage. The subsequent price drop triggered a cascading liquidation of overextended longs, but the broader uptrend remained intact.

During that period, the price closed above the EMA 20, SMA 50, and AVWAP levels, and confirmed that buyers still held structural control.

Fast forward to September 22, when long liquidations reached $467 million, and the setup was notably different. Open interest, for one, had eased to $27.3 billion, while funding slipped slightly negative to -0.0020. This depicted more pressure to maintain or add short positions.

ETHUSD. Source: TradingView Although funding had been positive in the days leading up to the sell-off, the sudden flip meant that bears were starting to dictate direction. Technically, Ethereum failed to defend key support around the area marked as 5°, as the price closed below the EMA 20, SMA 50, and critical AVWAPs that once acted as a safety net for buyers.

CryptoQuant said that this breakdown indicated that sellers had seized control of the trend and turned what might have been a routine shakeout into a deeper structural shift.

A $400 million liquidation in a bull-leaning market merely resets leverage, while the same magnitude in a seller-driven context can accelerate downside momentum.

Bearish Forecasts

Ethereum remains in a fragile zone. The asset briefly slipped below $4,000 on Thursday before recovering slightly above the level. Experts, including analyst Sykodelic, are now anticipating a correction that could push prices toward $3,500, and intermediate supports lie at $3,800-$3,900, as oversold signals and historical drawdowns align.

On-chain figures, however, also reveal significant whale accumulation and shrinking exchange holdings, which show that larger investors are capitalizing on weakness. This points to a shaky near-term outlook.