Ethereum, the second-largest cryptocurrency by market capitalization, slipped below the $4,000 threshold on Thursday morning as heavy liquidation and profit-taking weighed on digital assets. This marks the first time since early August that the altcoin has dipped under the psychological $4K mark.
Over the last seven days, Ethereum has dropped more than 12%, with another 3.77% decline recorded in the past 24 hours alone. At press time, ETH was trading near $3,980, down roughly 20% from its record high.
The selloff follows aggressive portfolio rebalancing triggered by the U.S. Federal Reserve’s recent interest rate cut. With gold emerging as a preferred safe-haven alternative, investors have shifted funds away from riskier crypto assets.
Ethereum’s market capitalization now stands at approximately $484 billion, with daily trading volume reaching $42.05 billion. Analysts note that cascading liquidations across derivatives markets exacerbated the decline, with more than $1.7 billion in altcoin positions wiped out—$212.9 million of which were Ethereum contracts.
The broader crypto market has mirrored ETH’s downtrend. Bitcoin, which briefly soared above $120,000 following the Fed’s decision, has since pulled back into a consolidation range between $110,000 and $115,000. Solana, another top altcoin, tumbled to $204.45, losing nearly 17% in a week.
“Ethereum’s breakdown below $4K was driven by a combination of macro uncertainty, technical weakness, and large-scale liquidations,” explained Rachael Lucas, a crypto strategist at BTC Markets.
Although the Fed’s 25 basis point rate cut in September initially sparked bullish expectations, Fed Chair Jerome Powell’s remarks that further cuts may not come soon dampened investor sentiment. As a result, cryptocurrencies remain under pressure despite broader optimism around alternative assets.
