TLDR
- Ether fell 9.5% to $3,700, wiping out $232M in leveraged long positions.
- Futures premium dropped to 4%, showing reduced but steady trader confidence.
- Whale activity near $3,700 signals limited bearish sentiment among holders.
- U.S. credit and labor data could shape ETH’s recovery potential in coming days.
Ether (ETH) traders remained calm despite a sudden price drop below $3,700 on Friday, triggering heavy liquidations and short-term volatility. The digital asset fell nearly 9.5% in under two days, with approximately $232 million in leveraged long positions wiped out. Yet, large holders and futures data suggest that most market participants do not expect a deeper decline, indicating that bullish sentiment remains steady for now.
ETH Price Decline and Market Reaction
Ether’s price correction came amid growing credit concerns in the U.S. banking sector. Two regional banks reported loan write-offs, sparking a broader risk-off move across equities and digital assets. Despite the pullback, ETH quickly stabilized near $3,700, where buying activity from large holders, often referred to as whales, became noticeable.
Data from CoinGlass showed that top traders on Binance reduced their long positions earlier in the week but later added exposure as the price tested lower levels. At the same time, OKX traders who increased their exposure near $3,900 reduced their holdings as the market declined. This behavior points to cautious positioning rather than panic selling among professional traders.
Derivatives Market Reflects Caution, Not Fear
Ether’s 30-day options delta skew surged to 14% on Thursday, according to Laevitas data. Such levels indicate traders are paying higher premiums for downside protection through put options. Under normal conditions, this skew stays between -6% and +6%, suggesting that while caution is rising, fear has not reached extreme levels.
Futures data showed a similar tone. The ETH monthly futures premium slipped to 4%, below the neutral range of 5% to 10%. This indicates a lack of strong bullish conviction but not a complete withdrawal from leveraged long exposure. The last major bullish trend in Ether futures occurred in early February, and traders appear to be waiting for clearer macroeconomic signals before committing to new positions.
Macro Concerns and Credit Market Worries
The sell-off in Ether coincided with renewed unease in global credit markets. Joachim Nagel, president of Germany’s Bundesbank, warned of potential risks in the expanding private credit market, which now exceeds $1 trillion. He told CNBC that regulators “have to take a close look” at the sector to avoid spillovers into traditional banking.
In the United States, the S&P Regional Banks Select Industry Index recovered slightly after Thursday’s losses, gaining 1.5% on Friday. However, large banks such as JP Morgan and Jefferies Financial Group reported losses in their auto loan portfolios. Yahoo Finance noted that auto lending remains the fastest-growing segment among U.S. banks, a trend that has increased exposure to credit risks.
Traders Eye U.S. Data and Global Trade Tensions
Market sentiment toward Ethereum also depends on upcoming U.S. economic data. Improving credit and labor indicators could support a broader recovery in risk assets, including cryptocurrencies. However, traders remain cautious as volatility persists across both equity and digital asset markets.
Tensions between the United States and China have added another layer of uncertainty. President Donald Trump stated on October 10 that the U.S. may impose a 100% tariff on Chinese goods starting November 1. The ongoing trade conflict, which now includes export restrictions on rare earths, has pressured investor confidence.
Despite these factors, large Ether holders continue to show resilience. Whale activity near $3,700 indicates limited selling pressure, suggesting that most expect the support level to hold in the near term. While a swift return to $4,500 appears unlikely, the stability among top traders shows that ETH bulls remain largely unmoved by the recent sell-off.
