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Ethereum saw a 20% price drop, wiping out over $1B in leveraged Ethereum trading positions.
On-chain data like SOPR below 1 signals investors selling at a loss, often seen near market bottoms.
BlackRock and other Spot Ethereum ETFs recorded fresh inflows after consistent outflows, showing renewed institutional interest.
Ethereum entered November 2025 with a steep decline and is currently trading around $3,300 to $3,360. Within two days, the ETH price dropped by around 20%, falling to the mid-$3,000 range. This sudden drop wiped out almost $1 billion worth of Ethereum trading positions, especially from traders who had borrowed money to bet on rising prices.
The declines are known as “capitulations,” where traders panic and sell or get forced out of the market. Even though the situation appears disastrous, such moments often clear out weak positions and prepare the market for recovery.
The futures market experienced a major change with the funding rate (which shows whether buyers or sellers are more aggressive) turning negative. This implies that traders betting on Ethereum’s downfall were paying traders who were betting on its recovery. This is important because it often suggests that too many people expect prices to keep falling, which can be a sign that the market is close to turning around.
At the same time, open interest, which measures how many futures contracts are still active, dropped significantly. This suggests that many traders closed their positions or got liquidated. When both funding rates fall and open interest shrinks, it usually means most of the risky bets have already been flushed out.
Ethereum’s on-chain data also indicates panic selling. A key metric, SOPR (Spent Output Profit Ratio), fell below 1, suggesting that people were selling their ETH coins at a loss. Historically, when this happens, it often marks a moment when weaker investors leave, and stronger long-term holders start buying.
Another important number is the amount of Ethereum supply still in profit. This dropped by nearly one-third from its recent peak in October. When fewer people collect profits, there is less pressure to sell. This also helps in stabilizing the prices.
Other long-term indicators like the MVRV ratio, which compares Ethereum’s current price to the average price when it last moved, have also cooled down. This shows the price is moving closer to fair value and away from overheated conditions.
Spot Ethereum exchange-traded funds (ETFs) in the United States had been seeing outflows for several days. However, on November 6, they recorded small net inflows of approximately $9 million to $13 million. BlackRock and Fidelity’s funds were among the ones that saw inflows, while Grayscale’s continued to see withdrawals. While these flows are small, they are important because they show renewed interest after the market drop.
Another boost for Ethereum’s future came earlier in September 2025, when US regulators made it easier for exchanges to list new crypto-based ETFs. This change could help more investors enter the Ethereum market over time.
Despite the price drop, Ethereum’s technology and network fundamentals are still solid. The Dencun upgrade, which was launched in March 2024, made the network much more efficient by reducing costs for Layer-2 platforms. These platforms help Ethereum process more transactions at lower fees.
Since this upgrade, transaction costs on Layer-2 networks have significantly reduced, making Ethereum more attractive for developers and users. This does not protect Ethereum from price drops in the short term, but it helps strengthen the network’s long-term value.
Also Read - Why Ethereum (ETH) Holders are Adding New Altcoins in 2025
Another positive sign is that there is more Ethereum inflow than there is outflow. When this happens, it usually means investors are shifting their coins into private wallets or staking rather than planning to sell.
Reports also show that during the recent crash, large holders or whales bought more than $1.3 billion worth of Ethereum, highlighting strong confidence and often a recovery.
Ethereum is currently priced at $3,300 with important support zones close to $3,000 and further down near $2,700 to $2,800. These areas have held up in the past during market declines. On the upside, Ethereum needs to break above $3,600 to show a stronger recovery.
The recent drop in Ethereum looks more like a temporary panic than the start of a long-term decline. Here are some reasons why ETH could recover:
The futures market has reset, with funding rates turning negative and open interest falling. On-chain signals like SOPR show that investors are selling at a loss, which happens frequently before a recovery. ETFs stopped bleeding and even started to see small inflows. Ethereum’s network is still improving, especially after the Dencun upgrade. Large holders are buying, and coins are leaving exchanges.
This does not mean Ethereum will bounce back immediately. The price may move sideways or even retest lower levels again. However, it implies that the risk of further sharp falls may be lower than before, improving the conditions for long-term buying.
If funding rates turn normal from negative, it shows the panic is easing. If SOPR rises above 1 again, it means sellers are no longer taking losses. More inflows into Ethereum ETFs would signal growing trust from institutional investors, whereas continued outflows from exchanges signal ongoing accumulation.
Also Read - Will Ethereum Rally to $6,500 After Bouncing at $3,800?
Ethereum’s latest price crash has caused uncertainty and forced selling, but an in-depth analysis implies that the market is preparing for a recovery. Leverage has been cleared out, investors are selling at losses, institutional interest is returning slowly, and the network remains fundamentally strong. These signs are typical of a market that is resetting and preparing for its next phase.
1. Why did Ethereum’s price drop recently?
Ethereum experienced a sharp drop of around 20% due to heavy liquidations in leveraged trading, which wiped out over $1 billion in futures positions and triggered panic selling across the market.
2. Is this a good time to start Ethereum trading or investing?
On-chain data like SOPR below 1, rising whale purchases, negative funding rates, and inflows into Spot Ethereum ETFs suggest the market may be in a capitulation phase, which historically creates buying opportunities.
3. What role do Spot Ethereum ETFs and BlackRock play in the current situation?
BlackRock and other asset managers reported fresh inflows into Spot Ethereum ETFs after several days of outflows, signaling renewed interest from institutional investors even after the price fall.
4. What on-chain signals indicate a possible recovery?
Indicators such as SOPR showing loss-selling, a drop in the percentage of supply in profit, declining open interest, and exchange outflows point to reduced selling pressure and growing accumulation.
5. Are Ethereum’s network fundamentals still strong despite the price fall?
Yes. The Ethereum network remains strong after upgrades like Dencun, which reduces Layer-2 transaction costs and improves performance, supporting long-term growth despite short-term price volatility.
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