Ethereum fails at $2.5K: How $466M in liquidations crushed ETH

ambcryptoPublished on 2026-02-06Last updated on 2026-02-06

Abstract

On February 5th, Ethereum (ETH) experienced a significant price drop, falling 14.96% from $2,148 to $1,826. This decline triggered $466.4 million in liquidations, with the majority being long positions. Market sentiment was at "extreme fear," with the Fear and Greed Index hitting a low of 11. ETH's performance against Bitcoin reached a three-year low, and it fell below the key psychological level of $2,000. Technical analysis showed strong bearish momentum, with ETH breaking below the crucial $2,500 demand zone and the $2,100 weekly swing point. The RSI entered oversold territory, and the On-Balance Volume (OBV) indicated heavy selling pressure. Liquidation heatmaps revealed that the recent drop wiped out significant liquidity around $2,000, with potential magnetic zones further south near $1,500. Despite the possibility of a bounce to $2,400 or even $2,700-$2,900, traders are advised to remain cautious. The lack of bullish response at key levels suggests further downside risk, and any short-term recovery may be an opportunity to sell before another bearish move.

On the 5th of February, Ethereum [ETH] witnessed $466.4 million in liquidations, with $382 million of them being long. On the day, ETH prices fell 14.96%, from $2,148 to $1,826.

Crypto market sentiment was in extreme fear. The Fear and Greed index reached 11, a low not seen since 2023. AMBCrypto reported that sub-20 readings on the index represent heightened stress, forced selling, and broad de-risking.

The ETH/BTC was at a 3-year low, representing the severe underperformance of the leading altcoin against the leading crypto. The $2k level was at high risk, noted aMBCrypto, and Ethereum has slid below this key psychological level since then.

Plotting the ETH path so far

On the 1-day chart, the strength of the bears was very evident. In May and June last year, ETH consolidated around $2,500 for a few weeks before catapulting higher in July. In November, the same area was tested as support and saw a bounce.

The subsequent retest over the past week saw no noticeable reaction from ETH bulls. The price bulldozed its way below the $2.5k demand zone and also beyond the weekly swing point at $2.1k.

The RSI was in oversold territory. The 18.68 daily RSI value on the 5th of January was the lowest since August 2024. The OBV also made a new low, reflecting heavy sell volume.

Can THESE zones drag ETH prices higher?

The liquidity to the south has been nearly wiped out, showed the 1-month lookback period liquidation heatmap. Zooming out even further, the 1-year heatmap agreed. A massive pocket of liquidations around the $2k price level was taken out during the recent dip.

The magnetic zones further south were at $1,500 and lower. Meanwhile, the $2,400 and the $2,700-$2,900 areas had some liquidations that the price could target, showed the 1-month heatmap.

Why Traders should sell the bounce

The lack of response at the $2.4k demand zone highlighted bearish dominance. A further drop toward $1.5k remains possible, so swing traders looking to catch any ETH bounce should be wary.

The $2.1k and $2.4k levels were likely to be revisited in the coming weeks. Traders can be prepared for a bearish reaction at these levels.

Final Thoughts

  • Ethereum raced past key demand zones over the past week’s relentless selling pressure.
  • It is possible that ETH would bounce to $2.4k in the coming weeks before its next bearish impulse move.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

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Related Questions

QWhat was the total value of liquidations Ethereum witnessed on February 5th, and how much of that were long positions?

AEthereum witnessed $466.4 million in liquidations on February 5th, with $382 million of them being long positions.

QWhat key psychological price level did Ethereum fall below, and what was the low point of the Fear and Greed Index on that day?

AEthereum fell below the key psychological level of $2,000. The Fear and Greed Index reached a low of 11, indicating extreme fear in the market.

QAccording to the 1-day chart, what was the significance of the $2,500 price level for ETH in the past, and how did the price react during its most recent retest?

AIn May and June of the previous year, ETH consolidated around $2,500 before moving higher in July. It was tested as support again in November and saw a bounce. However, during the most recent retest, there was no noticeable reaction from ETH bulls, and the price fell below it.

QWhat are the two 'magnetic zones' to the south that the liquidation heatmap identified as potential price targets for a further drop?

AThe two magnetic zones to the south identified for a potential further drop are $1,500 and lower.

QWhat is the article's trading advice for swing traders regarding any potential bounce in Ethereum's price?

AThe article advises swing traders to be wary and to sell the bounce, as a further drop toward $1.5k remains possible. It suggests that traders can prepare for a bearish reaction if the price revisits the $2.1k or $2.4k levels.

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