This morning, Ethereum plunged roughly 10% after an encouraging recovery rally last week, catching many traders and investors off guard.
Heading into the long-awaited “Merge” upgrade, most market participants had expected Ethereum to maintain its bullish momentum.
So what caused the sudden drop? Why did the second-largest cryptocurrency lose so much value in such a short span?
Heavy selling pressure
There was no single major headline about Ethereum or its ecosystem, but the market experienced substantial ETH selling as bearish traders began actively liquidating positions.
That selling pressure triggered nearly $100 million in liquidations, amplifying downward momentum and forcing the price sharply lower.
Today’s decline represents the third failed attempt for Ethereum to sustain a move above $2,000. That repeated resistance places the recent recovery at risk, because Ethereum must first recover lost ground before resuming any meaningful rally.
Despite widespread anticipation of positive effects from the “Merge,” the large sell-off has created uncertainty. Traders are asking why investors would rapidly offload a token expected to benefit from a major protocol upgrade.
Some market participants view the move as a potential bear trap that could either quickly reverse into renewed buying or act as the catalyst for a deeper bearish leg, pushing prices to new lows.
Another concern stems from the planned reduction in ETH issuance after the Merge. While lower supply can be bullish in theory, some investors feel the supply change alone may not be enough to drive strong demand in the near term, leaving room for continued volatility.
In short, today’s drop appears driven by concentrated selling and liquidations rather than a single news event. The market now faces a critical test: whether buyers will step in to defend support and restore confidence ahead of the Merge, or whether sellers will press the advantage and extend the pullback.