Ether (ETH) traders exhibited remarkable composure following a sharp decline below the $3,700 mark on Friday, which triggered extensive liquidations and a wave of short-term volatility. The digital asset plummeted approximately 9.5% within two days, erasing around $232 million in leveraged long positions. However, large holders, often referred to as whales, alongside favorable futures data, suggest that a substantial number of market participants do not foresee a deeper downturn, indicating a steady bullish sentiment prevailing for the moment.
ETH Price Drop and Market Dynamics
Ether’s price correction surfaced amid escalating credit concerns within the U.S. banking sector. Reports of loan write-offs from two regional banks triggered a risk-off sentiment that rippled through both equities and digital assets. Despite this pullback, ETH managed to stabilize around the $3,700 level, where significant buying activity from large holders became evident.
According to data from CoinGlass, top traders on Binance had reduced their long positions earlier in the week but later re-entered as prices tested lower thresholds. Conversely, traders on OKX, who had increased their exposure near $3,900, trimmed their holdings as the market declined. This behavior reflects cautious positioning rather than panic selling, demonstrating a level-headed approach from professional traders.
Derivatives Market Signals Caution
In the derivatives market, Ether’s 30-day options delta skew surged to 14% on Thursday, indicating that traders are paying higher premiums for downside protection via put options. Typically, this skew fluctuates between -6% and +6%, suggesting a rise in caution among traders; however, it has not yet reached alarmingly high levels of fear.
Futures data echoed a similar sentiment. The ETH monthly futures premium dipped to 4%, below the neutral range of 5% to 10%. This trend reflects a lack of strong bullish conviction, yet it does not signify a complete withdrawal from leveraged long positions. Traders seem to be awaiting clearer macroeconomic signals before committing to new positions, particularly after the last major bullish trend in Ether futures occurred in early February.
Macro Concerns and Credit Market Dynamics
The sell-off in Ether coincided with growing apprehension in global credit markets. Joachim Nagel, the president of Germany’s Bundesbank, alerted to potential risks in the expanding private credit market, which has now surpassed $1 trillion. He emphasized the need for regulators to closely monitor this sector to prevent spillovers into traditional banking.
In the U.S., the S&P Regional Banks Select Industry Index saw a slight recovery after Thursday’s losses, climbing 1.5% on Friday. Nevertheless, major banks such as JP Morgan and Jefferies Financial Group reported declines in their auto loan portfolios. As noted by Yahoo Finance, auto lending is currently the fastest-growing segment among U.S. banks, which has led to increased exposure to credit risks.
Traders Watch U.S. Data and Global Tensions
Market sentiment towards Ethereum is also influenced by impending U.S. economic data. Positive indicators related to credit and labor could foster a broader recovery in risk assets, including cryptocurrencies. However, traders remain vigilant as volatility continues to plague both equity and digital asset markets.
Furthermore, rising tensions between the United States and China have added another layer of uncertainty. President Donald Trump announced on October 10 that the U.S. may impose a 100% tariff on Chinese goods starting November 1, exacerbating the ongoing trade conflict which now includes restrictions on rare earth exports, thereby pressuring investor confidence.
In spite of these challenges, large Ether holders continue to demonstrate resilience. Whale activity around the $3,700 mark indicates limited selling pressure, suggesting that many anticipate this support level will hold in the near term. Although a rapid return to $4,500 seems improbable, the steadiness among top traders reveals that ETH bulls remain largely unfazed by the recent sell-off.
