Ethereum (ETH) prices plunged below key levels on Saturday and is now trading in the triple digits as an ongoing crypto rout intensifies.

ETH is down nearly 9% in the past 24 hours and is trading at $997.61, data from Etherscan shows. Breaking that support level likely indicates steeper losses for the token.

The token last traded in the triple digits in January 2021, before a stellar rally that year.

ETH’s latest slump stems from a large position, likely Three Arrows Capital, being liquidated. The liquidation dumped a large amount of ETH into the open market.

Peer Bitcoin (BTC) broke just below the closely monitored $20,000 level, a level that also indicates a high number of liquidations in the token. It is unclear to what level the token will now collapse.

$800 the next ETH support?

Crypto Trader @PostyXBT said on Twitter that after a break of less than $1000, $800 could be the next support level for the token. The level marks highs reached during a previous upcycle in 2018.

With ETH below what has been seen as the last major support point in the bear market, the future of the token’s price is now unclear. The downturn is expected to liquidate even more large positions in the market, causing more ETH to be dumped.

Data from Coinglass shows that $27 million worth of Ethereum positions, most of the long positions, have been liquidated in the past 4 hours.

Ethereum hit by leveraged trading

Macroeconomic Trends – Rising inflation and Federal Reserve rate hikes were the biggest factor in ETH’s decline this year.

But over-leveraged trades by major traders, namely Celsius and Three Arrows Capital, have also hurt valuations.

Both entities had borrowed large amounts of ETH while raising Lido-Staked Ethereum (stETH) as capital. But when stETH prices started falling faster than ETH, the two were forced to dump their holdings on the open market, pushing ETH prices down.

With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can watch him play video games or watch Seinfeld reruns. You can reach him at [email protected]

The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.

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