Crypto Community Reacts to Ethereum’s Dip Below $4K

Ethereum’s price dipped below the $4,000 mark earlier today, causing a major liquidation that wiped out a whale’s $45 million ￰0￱ event has prompted debate within the crypto community, with some analysts viewing it as a “bear trap” while others question the safety of decentralized ￰1￱ Crash Wipes Out $45M Position Ethereum’s (ETH) price dropped to $3,994 during Thursday morning trading in Asia, marking its lowest level since early ￰2￱ the decline, blockchain analytics platform Lookonchain reported a major liquidation involving a large ETH ￰3￱ 0xa523 saw their entire long position of 9,152 ETH, valued at $36.4 million, wiped out in the ￰4￱ cumulative losses have now surpassed $45.3 million, leaving less than $500,000 in his ￰5￱ incident has sparked discussion across the crypto community on X.

Notably, crypto veteran Chainyoda said that in today’s market, decentralized finance offers no such thing as low ￰6￱ added that Vitalik Buterin’s view has been misinformed by those who overlook the dangers in today’s ￰7￱ Ethereum co-founder had claimed in a recent essay that DeFi has matured into a safer, more stable ecosystem. However, the recent wipeout event suggests ￰8￱ critics questioned why such a massive position was opened without a stop loss, while others warned that the heavy use of leverage in DeFi makes even big investors ￰9￱ user noted that the leverage game “always has high stakes.” Is ETH’s Crash a Bear Trap? Despite the second-largest cryptocurrency’s momentary decline, some analysts remain highly bullish on its long-term ￰10￱ Guy described the dip as a bear trap, suggesting that the correction is made to shake out overleveraged traders before ETH resumes its upward ￰11￱ X user under the handle ￰12￱ supported this view, noting that high-risk traders were likely being pushed out of the market while more strategic investors accumulated at the ￰13￱ support of the analysis, another trader said they would be buying into the ￰14￱ this month, crypto analyst Johnny Woo had warned that Ethereum’s September sell-off could be “the biggest bear trap in history,” pointing to a potential head-and-shoulders pattern that may soon be invalidated in ￰15￱ predicted that the crypto asset would drop to a support level of approximately $3,350 in September before rebounding in October and reaching new peaks in November.

A similar pattern had occurred in September 2021, when ETH dropped 30% only to surge to new all-time highs two months later.