Ethereum risks $1.7 billion in liquidations below $2,000

Technical analysis indicators for Ethereum (ETH) are flashing warnings that a sharp decline may be imminent if the price drops below $2,000. Analysts are tracking the “bear flag” formation, which points to mounting selling pressure as the key support level nears.Bear flag signals possible deeper dropLiquidation risk mounts for leveraged tradersAre whales accumulating or exiting?Downward pressure set to intensify Bear flag signals possible deeper dropOn the daily chart, Ethereum is testing the lower boundary of the bear flag formation at the $2,000 mark. Should ETH fall below this area, a nearly 50% price drop toward $1,075 could unfold. The last time a similar breakdown occurred in January, ETH plummeted by 41.5% in a short period.Quick guide: A “bear flag” is a chart pattern where prices briefly rebound after a steep decline, moving within an upward channel before risking another downward break. It is often viewed as a sign of a continued downtrend.Some market commentators believe that if ETH closes below $2,000, prices could quickly slip to $1,800 or even lower territory. Weakness in technical indicators, especially the daily and weekly Relative Strength Index (RSI), has become more pronounced, reinforcing the signals of a possible downturn. Coin Signals observed that “$ETH is on the verge of breaking below the lower band of the bear flag. If it cannot hold above $2,000, a sell-off to $1,800 followed by new lows could unfold.”Liquidation risk mounts for leveraged tradersIf ETH price slips under $2,000, over $1.7 billion worth of leveraged long positions across exchanges could be liquidated. Margin trades open on major exchanges face the threat of rapid closure should prices breach this psychological threshold. According to CoinGlass, this level could trigger an extra wave of selling pressure as traders scramble to cover losses.Are whales accumulating or exiting?Despite repeated price swings, there is little evidence that major ETH holders (whales) are buying in bulk. Data from Glassnode shows wallets holding more than 10,000 ETH have dropped to 1,050, a ten-month low. These large accounts have declined by about 70 wallets in the past month, marking the slowest pace since the start of the year.Similarly, wallets with balances between 1,000 and 10,000 ETH have fallen to 4,750, the lowest level in nine months, with about 50 such accounts disappearing in the last month. Both big and mid-sized investors appear to be lightening their positions amid growing uncertainty.This trend signals reduced confidence in the short term as investors move to cut risk. Analysts note that this widespread position reduction coincides with an uptick in ETH being transferred to exchanges, creating additional pressure on the price.Keith Alan noted that failing to hold at technical support zones increases “the risk of consecutively testing lower support levels,” with the $1,300 region likely to become important if the bear flag pattern prevails.Downward pressure set to intensifyAll indicators point to $2,000 as the crucial threshold for Ethereum. If this support is decisively breached, both technical and liquidity factors could accelerate the decline. Despite a recent bounce, the absence of widespread accumulation among whales and sharks, and ongoing position reductions, suggest that downside risks are coming to the forefront in the short term.Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.