Ethereum (ETH) traded near $2,500 on October 9 after a sharp selloff forced heavily leveraged traders to close their positions across major exchanges. The price recovered from a midweek low near $2,406, although buyers had yet to establish a clear recovery.

The sudden drop followed several days of growing bets on higher prices. When ether moved lower, exchanges closed leveraged positions that lacked sufficient collateral to cover their losses, with the forced closures converting into additional sell orders and adding to selling pressure as the market fell.

Over $1 Billion in Crypto Liquidations

Market data showed more than $1 billion in crypto positions liquidated during Thursday's decline. Ether accounted for a larger share of the losses than bitcoin, as traders using borrowed funds faced heavy liquidations across major exchanges. The latest liquidation figures showed ether losses exceeding bitcoin's despite the difference in market size between the two assets.

That selling cleared many short-term bets, but the recovery remained limited as traders assessed whether spot buyers would return to sustain the move.

Analyst Tracks Changes in Trader Positions

Trader Daan Crypto Trades warned on October 7 that ether kept making fresh lows while active futures positions continued rising. He also reported heavy selling in the regular spot market, suggesting the decline could still continue.

After Thursday's fall, Daan said the market had finally cleared many bets on rising prices. He described the drop in open interest—the total number of futures contracts still open on exchanges—as a possible early sign of a local recovery, not proof of a lasting rebound.

His October 9 update stated:

$ETH The move indeed wasn't done yet as per the initial tweet. It can be very enticing to buy the blood after the initial candle, but when price keeps grinding down and there has been no proper flush, very rarely does it turn around. Usually it is just anticipation before the… pic.twitter.com/tQBqrGq6Wr

— Daan Crypto Trades (@DaanCrypto) October 9, 2026

The update also pointed to flat funding rates and little increase in futures positions during the bounce. Funding rates are the recurring payments exchanged between traders on perpetual futures, and readings near neutral generally signal that leveraged positions have yet to rebuild.

ETF Outflows Extend Selling Pressure

Earlier reports on Ethereum ETF withdrawals showed that selling pressure extended beyond leveraged trading. US spot ether funds continued to face redemptions, and a separate report on fund outflows tracked seven consecutive sessions of withdrawals, adding another measure of demand as prices settled near their recent lows. The sustained outflows have weighed on sentiment even as conditions in futures trading improved. Because these funds hold ether directly, sustained withdrawals represent a direct drain on market demand.

Spot Trading Sets Next Direction

Other market accounts reported growing ether long positions on Bitfinex despite the drop. They also identified possible forced closures of bear bets above current prices, although such liquidation maps cannot predict when orders will trigger.

Traders are monitoring spot buying demand as the price approaches a crucial resistance level near $2,500—a price zone where clustered sell orders can slow advances. Buying through regular exchanges could support the rebound, while renewed selling could bring recent lows back into view. Daan said the next move would depend on spot trading rather than fresh leveraged bets, placing outright demand at the center of any sustained recovery attempt.