Ethereum experiences a sudden synchronous plunge! Breaking below $2800, with over 230 million positions liquidated in two days!

The cryptocurrency market has witnessed renewed volatility, with Ethereum (ETH) plunging in tandem on 18 December, breaching the critical $2,800 threshold. The daily decline reached 5.6%, hitting a low of $2,750. Accompanying this price drop, liquidations exceeded $230 million over two days, marking the most severe long liquidation since September and heightening market anxiety.

Specifically, Ethereum opened lower and fluctuated downward throughout the day. The decline accelerated in the afternoon, breaching the $2,800 level before plunging further to $2,750. Although it rebounded slightly by the close, it remained at a low point, with the 5.6% drop dealing a heavy blow to long positions. This plunge was not isolated, as most major cryptocurrencies followed suit, intensifying market correction pressures.

Liquidation data vividly reflects market volatility. According to derivatives trading platforms, liquidation volumes surged during Ethereum's two-day decline, cumulatively exceeding $230 million. Long positions dominated the liquidations, with many investors suffering losses due to delayed stop-losses or reckless attempts to catch the bottom. This marks the most severe liquidation of Ethereum long positions since September, highlighting the current intensity of bull-bear dynamics and fragile investor sentiment.

Amidst this volatility, derivatives traders' strategies are becoming clearer, with most favouring a ‘bearish volatility’ stance, betting that Ethereum will remain range-bound between $2,600 and $3,000 until year-end. Persistent global macroeconomic uncertainties, including Federal Reserve policy, continue to influence markets. While Ethereum's ecosystem develops steadily, insufficient near-term catalysts are likely to sustain a rebound. ‘Betting against volatility’ enables traders to hedge against extreme risks while identifying opportunities within the range.

This episode serves as a cautionary tale for retail investors. The cryptocurrency market inherently features high volatility and risk, compounded by a complex macroeconomic landscape where adjustment pressures may materialise at any moment. Investors should approach volatility rationally, avoid herd mentality, manage positions prudently, set stop-loss and take-profit levels, and refrain from making irrational decisions driven by short-term market movements.

Looking ahead to year-end trends, should Ethereum find support at $2,600, a $2,600–$3,000 oscillation pattern may emerge. However, macroeconomic headwinds or black swan events could breach the lower boundary, triggering fresh corrections. Subsequent global macroeconomic data, regulatory policies, and developments within the Ethereum ecosystem will become pivotal variables influencing price trajectories.