Ether Plunges 20%: $1B Liquidation Wave Accelerates Crypto

Ether Plunges 20%, $1B Liquidation Wave Accelerates Crypto Losses

5 November 2025 at 13: 05

Reading time: 2 minutes

Ethereum's ether (ETH) has lost more than 20% in two days, with an abrupt drop reminiscent of the October 10th crash. At the start of this week, the second-largest cryptocurrency was trading at around $4.000, but by Tuesday afternoon, the price had reached nearly $3.000, a level not seen since mid-July. This recent correction marks the second major price drop in a month, with Ether falling from nearly $4.500 to $3.440 on October 10th—a staggering 25% drop.

After a slight rebound, ETH recently traded just above $3.200, though this still represents a 9,4% decline over the past 24 hours. The sharp price drop has led to liquidations worth over $970 million in leveraged ETH derivatives markets, as reported by CoinGlass. Most of the positions liquidated as a result were long positions, where traders bet on rising prices as ETH fell through various support zones.

Markus Thielen, the founder of 10x Research, expressed his concerns about the situation in a note. He pointed out that the recent drop in ETH offers little support for further price increases and that there is more room to the downside. BitMine, the largest ETH treasury firm that has been regularly purchasing the asset in recent months, appears to have exhausted its available funds, limiting its ability to purchase ETH. Thielen reported that BitMine has amassed nearly 3,4 million ETH in total, with an estimated cost basis of approximately $3.909. This would mean the company currently has approximately $2 billion in unrealized losses.

While the risk of immediate liquidation is currently low, Thielen says the question of who will be the next ETH buyer now that BitMine appears to have exhausted its capacity is a significant concern. Demand for exchange-traded funds (ETFs) has also fallen. Inflows were $9,5 billion in July and August when BitMine ramped up its purchases, but these inflows have since dried up. In fact, $850 million has been pulled out of ETH ETFs since the October crash, leaving room for further selling as many ETF investors are now facing losses at current price levels.

In addition, retail interest has also declined significantly. Google search trends, a rough indicator of retail demand, are only at 13% of their peak. With the disappearance of the factors that propelled ETH to nearly $5.000 in August, Thielen predicts that course will stabilize in the $2.700 to $2.800 range, which are the next more likely support levels.

Frequently Asked Questions

What are the main reasons for ETH's recent price drop?
ETH's recent decline can be attributed to a combination of leveraged liquidations, decreased ETF demand, and a lack of retail interest.

How much does BitMine influence the ETH market?
BitMine has purchased nearly 3,4 million ETH and plays a crucial role in the market. Their capital depletion could put pressure on ETH's price stability.

What could be the future of ETH according to current data?
With current market dynamics and a lack of new capital, ETH could stabilize in the $2.700 to $2.800 range as previous price catalysts fade away.

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