$1.2B Ethereum Liquidation Threat at $4K: Will ETH Smash Its All-Time High?

Ethereum's $4K price level isn't just a psychological barrier—it's a financial tripwire. With $1.2B in liquidations looming, the market's either primed for a breakout or a brutal reckoning.

Liquidation Avalanche or Launchpad?

Exchange order books show massive leveraged positions clustered around $4K. One big whale sell-off could trigger cascading liquidations—or fuel a gamma squeeze if bulls hold the line.

ATH in the Crosshairs

ETH's flirting with its all-time high while traders play chicken with leverage. The smart money's watching OI-weighted funding rates like hawks (when they're not busy inventing new synthetic derivatives).

This isn't price discovery—it's a high-stakes game of hot potato with margin calls. Whether ETH breaks records or breaks portfolios depends who blinks first.

Key Insights:

• ETH price is just 2.8% away from triggering $1.2 billion in short liquidations.
• Exchange reserves remain at monthly lows, despite institutional selling, hinting at low sell pressure.
• Ethereum liquidations could push ETH toward a new all-time high above $4,877.

Ethereum is slowly climbing toward the $4,000 mark, a level that traders are watching very closely right now. It’s become one of the most talked-about numbers in the crypto space now.

While many cryptocurrencies have been quiet, ethereum is up about 2% in the past 24 hours. In the past year, it has grown by around 17%. But that might just be the beginning.

There’s a lot of buzz around Ethereum liquidations, and they could be the thing that finally helps the ETH price shoot up and maybe even hit a new Ethereum all-time high.

What’s With All These Ethereum Liquidations?

At the moment, over $1.2 billion worth of short positions (bets that the ETH price will fall) are sitting between $3,950 and $4,050.

These are trades placed by people who think Ethereum will go down. But if ETH goes up to $4,000 or higher, these traders could start getting “liquidated.”

A liquidation happens when a trader’s losses get too big, and their trading platform (like Binance or Bitget) automatically closes their trade. This is done to stop the trader from losing even more money.

In this case, if ETH goes above $4,000, all these short traders WOULD be forced to buy ETH to close their losing trades. This buying creates pressure that pushes the ETH price even higher.

ETH is now trading close to $3,900, which is just 2.8% below the $4,000 level. If that number is hit, the Ethereum liquidations could kick off what’s called a “short squeeze,” a chain reaction of forced buying that could push ETH to $4,200 or even higher.

Are People Selling Their ETH?

To know if ETH will really go higher, it helps to look at exchange reserves. These are the number of ETH tokens sitting on crypto exchanges like Binance, Coinbase, and OKX.

When people want to sell, they usually send their ETH to exchanges.

But here’s the interesting part: Ethereum exchange reserves are dropping. Over the past month, reserves have fallen from around 20 million ETH to under 19 million ETH, even though the price has gone up.

That means people aren’t rushing to sell; they’re likely holding their ETH, maybe expecting more upside.

Exchange reserves simply tell us how much ETH is sitting in trading platforms. Lower numbers usually mean people aren’t preparing to sell, which is a bullish sign.

That said, there was one notable transaction recently. A wallet linked to HashKey Capital, a major investment firm based in Asia that often invests in crypto projects, deposited 12,000 ETH to OKX, a popular crypto exchange.

This MOVE could be a sign of possible selling. But it’s just one wallet, and the overall trend still shows most ETH holders aren’t moving their coins to sell.

So, despite this one large deposit, Ethereum exchange reserves remain low, which is positive for the price.

Can ETH Price Break Its All-Time High?

If Ethereum liquidations cause a strong push above $4,000, the next key levels are based on Fibonacci extension, a tool that traders use to predict possible future prices.

The next targets are $4,175, $4,380, $4,585, and finally $4,877.

The $4,877 level is especially important. That’s Ethereum’s previous all-time high, which it hit back in November 2021.

If ETH crosses that number, it will be in price discovery, meaning there are no previous price ceilings left. The ETH price could then move freely to new highs.

Adding to the bullish case is ETH’s growing use in DeFi (decentralized finance). The total value locked (TVL) in Ethereum-based DeFi apps is now around $85.9 billion.

This shows that people are actively using ETH, not just trading it, which adds real demand beyond speculation.

There’s over $1.2 billion in Ethereum liquidations waiting just above $3,900. If ETH crosses $4,000, it could trigger a wave of forced buying, pushing the ETH price even higher.

With exchange reserves low and traders not rushing to sell, the setup looks strong for a possible breakout.

Whether Ethereum reaches a new all-time high depends on whether it can break through that $4,000 barrier. If it does, the next big goal is $4,877, and if that falls, Ethereum enters brand new territory.

For now, all eyes are on Ethereum liquidations and how they might shape the ETH price in the days ahead.