Ethereum Liquidity Pools Signal Buy-the-Dip Setup as ETH Dumps to $4.3K

TL;DR

• Ethereum liquidity maps show buy clusters between $3,800–$4,200, offering a strong potential support zone.
• Short liquidations worth $5B build above $5,000, setting the stage for a possible squeeze.
• ETH forms a bullish pennant, with a breakout over $4,600 opening a clear path to $5,000.

Liquidity Clusters Below Current Price

Ethereum is trading around $4,330, with data showing deep liquidity resting below current levels. A heatmap of the order book highlights large buy concentrations between $3,800 and $4,200, marked by strong horizontal bands.

Analyst Ted commented,

https://twitter.com/TedPillows/status/1961368229240025323?ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank

He added that the next few weeks could bring golden opportunities to buy back $ETH and other altcoins at massive discounts. These bids suggest that if Ethereum dips into this zone, selling pressure may be absorbed quickly by accumulated demand.

While buyers wait lower, a liquidation cluster has formed above. Exchange data shows that if ETH reaches $5,000, more than $5 billion in short positions will be wiped out.

Breakdown figures show $14 million on Binance, $10.81 million on OKX, and $13.54 million on Bybit at that level. Crypto Aman warned,

“Over $5 billion in shorts will be liquidated if $ETH hits $5,000. Will short traders be liquidated?”

Analysts describe such levels as liquidity magnets, where price acceleration can trigger forced buying and drive momentum higher.

Bullish Pennant Formation on Charts

On the 4-hour chart, ETH has been trading inside a descending channel, which analysts view as a bullish pennant. The asset has tested both the upper and lower boundaries multiple times, with rejections and rebounds marking the structure.

https://twitter.com/LordOfAlts/status/1961337223560974517?ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank

Henry said,

“$ETH looks all set for pump hard. One bullish news, and it will send all at once without any break.”

He expects a short correction before a breakout, adding that the “road to $5k is clear” once ETH crosses resistance near $4,600.

Institutional Signals Add Weight

Since the breakout around $1,400, Ethereum recorded a steady climb, posting progressively higher highs through the following months. For altcoins in general, September is usually a month of corrections.

October is the month when the bounce back is stronger. These seasonal swings fit in with the expectations of a little bit of turbulence before another push higher.

Institutional voices are also weighing in. Jan van Eck, CEO of VanEck, described Ethereum as “the Wall Street token” in a recent Fox Business interview. He said the rise of stablecoins means every bank and financial services company now needs infrastructure to process them.

With heavy buy orders stacked below and liquidation fuel waiting above, Ethereum sits in a zone where both dip demand and breakout pressure could shape the next move.