TLDR
- Ethereum dropped to $3,055 on Tuesday, wiping out $1.3 billion in leveraged long positions and declining over 13% for the week.
- Over $7 billion in short positions are clustered near $4,000, creating conditions for a potential short squeeze if ETH recovers.
- Whales purchased nearly 400,000 ETH worth $1.37 billion over three days, with the largest buyer acquiring 257,543 ETH at $3,480.
- Technical analysis shows a hidden bullish divergence on daily charts, suggesting the correction may be nearing a bottom around $3,000.
- Analysts remain optimistic about ETH’s long-term prospects, with some predicting targets between $4,200 and $10,000 backed by institutional interest and the upcoming Fusaka upgrade.
Ethereum experienced a sharp decline to $3,055 on Tuesday. The drop represented a weekly loss exceeding 13 percent.
The price movement cleared liquidity from equal lows near $3,400. This zone had accumulated heavy leverage buildup before the crash.
On Binance alone, over $39 million in long positions were liquidated during this correction. This marked the largest liquidation event since October 10.
Across all exchanges, total long liquidations surpassed $1.3 billion. The massive liquidation reset the derivative landscape and created a major imbalance between long and short positions.
The next major liquidity pocket sits between $3,000 and $2,800. These levels have previously acted as long-term structural supports for ETH.
Whale Accumulation During Price Decline
While prices fell, large holders moved quickly to accumulate ETH. Multiple whales purchased 394,682 ETH worth $1.37 billion over three days.
Whales keep accumulating $ETH — over the past 3 days, many whales have collectively bought 394,682 $ETH($1.37B).https://t.co/RhDYQM0yl6 pic.twitter.com/3qMSojTSTu
— Lookonchain (@lookonchain) November 6, 2025
The largest buyer was an address that had previously borrowed 66,000 ETH from Aave. This whale repurchased 257,543 ETH at approximately $3,480 for a total of $896 million.
Bitmine added 40,719 ETH worth nearly $140 million. Analyst Ted Pillows noted that Bitmine’s ongoing ETH purchases reportedly range between $200 million and $300 million weekly.
Other buyers included 7 Siblings, OTC traders, and various new wallets. All increased their ETH positions during the market correction.
On the weekly chart, Ether has cycled through four classical market stages in 2025. These stages include decline, accumulation, markup, and distribution.
During the decline phase, ETH broke below multiple Anchored Volume-Weighted Average Price levels. These dynamic support and resistance lines measure the average price buyers paid from specific starting points.
ETH then entered a 10-week accumulation phase between $2,000 and $3,000. The price rallied through those same levels during its markup stage to reach an August yearly high.
Short Squeeze Setup Developing
More than $7 billion in short position liquidity is clustered around the $4,000 level. The current drop has primed the market for a potential short squeeze.
If price momentum reverses near the $3,000 support, even a modest recovery could trigger cascading liquidations. Over-leveraged shorts would be forced to close positions, accelerating a rebound.
$ETH possible repeating pattern here but on a larger scale. Need to see $3500 reclaim quick and hold for confirmation
*NFA pic.twitter.com/vh14EQzXsr
— Reformed Tr🅰️der (@Reformed_Trader) November 5, 2025
ETH’s daily chart displays a hidden bullish divergence between the price and the relative strength index. The price forms lower lows while the RSI holds equal lows, often signaling a trend reversal.
Lacie Zhang, Research Analyst at Bitget Wallet, said crypto markets are entering a cautious calm period. Zhang noted that if macro data trends favorably, Ethereum may approach $4,200.
Analysts at CoinDCX believe ETH is eyeing a promising $4,800 target. The exchange analysts wrote that backed by network scalability improvements and rising institutional adoption, prediction models indicate a potential 25 to 30 percent upside by late 2025.
Some analysts predict targets as high as $10,000 for Ethereum. The December Fusaka upgrade has attracted strong institutional interest to ETH.
Ethereum is currently trading at $3,421, a 3.72 percent increase over the past 24 hours.
