Ethereum has retreated to $4,520 after reaching an all-time high above $4,900, with analysts warning that a recurring weekly liquidation pattern poses ongoing risks to leveraged traders. The 8.9% pullback from the peak has highlighted systematic vulnerabilities in the cryptocurrency's leveraged markets, particularly during Monday trading sessions.
What to Know:
- Ethereum shows a consistent pattern of highest liquidations occurring on Mondays, creating predictable risks for leveraged long positions
- The cryptocurrency has experienced single-day liquidation spikes exceeding 300,000 ETH during sharp market reversals in April and June 2025
- Technical analysts identify $3,900-$4,000 as crucial support levels that could determine whether Ethereum reaches $6,000-$8,000 or falls to $3,200
Leveraged Positions Face 'Monday Trap' Pattern
XWIN Research Japan, a contributor to CryptoQuant's analysis platform, has documented a striking weekly rhythm in Ethereum's liquidation events. The research shows Monday consistently records the highest liquidation volumes, followed by Sunday and Friday sessions. Saturday shows the lowest activity due to reduced market participation.
This "Monday Trap" phenomenon particularly affects traders who maintain leveraged long positions over weekends.
When institutional and retail trading flows resume Monday morning, these positions become vulnerable to sudden price reversals. The pattern has proven costly for overleveraged traders who bet on continued price increases.
During April and June 2025, Ethereum experienced liquidation spikes exceeding 300,000 ETH in single trading days. These cascading sell-offs amplified downward price movements as automatic position closures triggered additional selling pressure. The analyst noted that weekend optimism often translates into dangerous exposure when higher-volume Monday sessions begin.
"Carrying weekend optimism into Monday's higher-volume sessions is risky," the research emphasized. Short-term leverage magnifies losses in predictable ways, creating systematic vulnerabilities that repeat weekly.
Technical Analysis Points to Key Support Levels
Market analyst Crypto Patel recently outlined Ethereum's technical situation following its retreat from $4,957 to current levels around $4,400. The analysis identifies $3,900-$4,000 as a critical support zone that could determine the cryptocurrency's next major move.
If this support level holds, Patel suggests Ethereum could target price ranges between $6,000-$8,000.
However, a breakdown below $3,900 could lead to further declines toward $3,500 or even $3,200 levels. These technical markers align with historical patterns where key support breaks have led to extended corrections.
Recent exchange netflow data shows Ethereum moving toward outflows rather than inflows. This suggests investors are withdrawing coins into self-custody rather than preparing to sell on exchanges. Such behavior typically indicates long-term confidence rather than immediate selling pressure.
Understanding Cryptocurrency Market Mechanics
Liquidations occur when leveraged positions cannot meet margin requirements during adverse price movements. In cryptocurrency markets, these events often trigger automatic selling that can accelerate price declines. Ethereum's high liquidity makes it particularly susceptible to large liquidation events affecting overall market sentiment.
Exchange netflows measure the difference between cryptocurrency deposits and withdrawals from trading platforms.
Negative netflows (outflows) typically suggest accumulation behavior, while positive netflows (inflows) often indicate preparation for selling. These metrics help analysts gauge market sentiment beyond price movements alone.
Institutional demand continues supporting Ethereum's long-term outlook despite short-term volatility. Ongoing discussions about staking integration within regulated financial products such as exchange-traded funds provide fundamental support for the cryptocurrency's value proposition.
Closing Thoughts
Ethereum's recent correction from record highs has revealed systematic risks in leveraged trading patterns, particularly the recurring Monday liquidation phenomenon. While technical support levels between $3,900-$4,000 may determine near-term price direction, the underlying pattern of weekly liquidation cycles continues to threaten overleveraged positions regardless of long-term market trends.