Ethereum (ETH) went through a peak hour of liquidations on October 15, erasing more than $157 million in positions on Binance alone. A shift in sentiment triggered a sharp reversal across the highly leveraged ETH market, where forced closures of leveraged trades convert falling prices into cascading sell orders, underscoring the fragility of the recent price recovery.

As of October 15, ETH had logged over $157 million in liquidations on Binance, while across all markets more than 92% of liquidations struck long positions, according to Coinglass liquidation data. The hourly event was the most significant in the past six months, cutting short ETH's recent recovery.

Over a full 24-hour window, ETH liquidations totaled $292 million, with roughly $200 million for Bitcoin (BTC). Most closures occurred within a compressed time span, with the most at-risk positions often wiped out within minutes.

The episode marks a shift in market dynamics: while short liquidations dominated in September, the crypto market has now endured three peak episodes of long liquidations over the past two weeks. Long positions are bets on further gains, and their forced closure adds sell-side pressure at the very moment prices are already falling. The event arrived just days after analysts noted a peak level of long positions, with liquidity accumulating on Bitfinex.

Following the cascade, ETH sank to $2,362.43, breaking its attempt to regain ground near $2,800. The wipeout came after several successful weeks for ETH, including a 74.6% gain in the third quarter.

According to analyst Darkfost (@Darkfost_Coc), the ETH market reacted to news of higher US consumer price index readings for September, driven by elevated gasoline and energy costs. Inflation readings carry outsized weight in leveraged crypto markets because they feed into expectations for US interest rate policy, a key driver of risk appetite.

ETH reverses recovery after long liquidations

ETH has sunk more than 8% over the past week, outpacing BTC's losses. The ETH fear and greed index has dropped to 29 points, a level indicating fear. Sentiment now sits at its lowest point since July, despite the higher market price. In 2026, periods of fear have often been followed by neutral consolidation or a return to greed.

During the liquidation event, ETH swept the cluster of liquidity just below $2,500 and continued to force out positions in the $2,300 range.

Based on Coinglass' liquidation heatmap, new short positions are building toward the $2,600 level, potentially setting the stage for a recovery driven by a short squeeze, a dynamic in which rising prices force short sellers to buy back and can accelerate the move. The crypto market remains heavily dependent on derivatives, but ETH liquidity has diminished in October. The recent liquidations shrank open interest—the total value of outstanding futures contracts—from close to $20 billion down to $15 billion.

More than 61% of traders are long on ETH overall, with the exception of Hyperliquid, where only 50% of remaining ETH positions are long. Hyperliquid whales are also exposed: one large long bet stands close to liquidation, per on-chain observers, paying $670,000 in funding fees—the periodic payments exchanged between long and short holders to keep perpetual contract prices aligned with spot—and carrying $11 million in unrealized losses.

What comes next for ETH?

ETH signals track closely with rising inflation perceptions and worsening market sentiment. In 2026, ETH has traded more speculatively, reflecting expectations of a broad recovery in DeFi, token, and on-chain activity. Ethereum remains a heavily used chain for staking, stablecoin operations, and general smart contract activity.

The derivatives market may dictate ETH's next moves. Most available liquidity now sits in short positions, which could be liquidated if ETH quickly regains its levels. The recent cascade wiped out most existing positions, sparking hopes of a short-term reversal.

During the latest dip, smart money whales bought spot ETH and withdrew it from Binance, and the market fluctuations allow ETH whales to rebuild their positions ahead of a potential recovery.

Sentiment remains cautious, however, leaving room for another dip and possibly a slide below $2,000 in the short term. ETH has also weakened to 0.029 BTC, despite BTC's recent slide to $80,000.