Ethereum (ETH) prices slumped below key levels on Saturday, and are now trading in the triple digits as an ongoing crypto rout intensified.
ETH is down nearly 9% in the past 24 hours, and is trading at $997.61, data from Etherscan shows. Its breaking of that support level is likely to signal steeper losses for the token.
The token last traded in the triple digits in Jan 2021, before a stellar rally that year.
ETH’s latest slump stems from a large position, likely Three Arrows Capital, being liquidated. The liquidation caused a high amount of ETH to be dumped on the open market.
Peer Bitcoin (BTC) just broke below the close-watched $20,000 level– one that also signals a large amount of liquidations in the token. It is unclear to what level the token will now slump.
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$800 the next ETH support?
Crypto trader @PostyXBT said on Twitter that after a break below $1000, $800 might be the next support level for the token. The level marks highs reached during a previous upcycle in 2018.
With ETH breaking below what was perceived to be its last major support point in the bear market, the future of the token’s price is now unclear. The downturn is set to liquidate even more large positions in the market, causing more ETH to be dumped.
Data from Coinglass shows $27 million worth of Ethereum positions have been liquidated in the past 4 hours- most of them long positions.
Ethereum slammed by leveraged trading
Macroeconomic trends- rising inflation and Federal Reserve rate hikes have been the biggest factor in ETH’s fall this year.
But overly leveraged trades by major traders, namely Celsius and Three Arrows Capital, have also damaged valuations.
Both entities had borrowed high amounts of ETH while putting up Lido-Staked Ethereum (stETH) as capital. But when stETH prices began to fall faster than ETH, the two were forced to dump their holdings on the open market, causing ETH prices to spiral downwards.
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