ETH sharp drop of 0.78% in 15 minutes: short liquidation followed by position rebalancing and technical selling pressure resonance

2026-07-08 01:30-01:45 UTC, ETH dropped 0.78% in 15 minutes, with price ranging from 1749.88 to 1773.42 USDT, amplitude 1.33%. After the massive short squeeze on July 3, the market is in a position rebalancing phase with volatility still high.

The main driver of this anomaly was a technical pullback due to an imbalanced derivatives market structure. On July 3, ETH short liquidations reached $156.92 million, accounting for 89.38% of the total market liquidations that day. After the short squeeze effect rapidly released, buying power waned, causing price to give back gains. Meanwhile, open interest grew 26% to $25.4 billion by mid-April, with positions highly concentrated on a few platforms: Binance 29%, Gate 17%, Bybit and a leading platform together about 17%. As price tested key technical levels, the risk of cascading margin calls amplified.

Second, on-chain fund behavior shows some investors have started re-depositing into exchanges. ETH net position change narrowed from -2.3 million to -1.5 million, indicating slowing capital outflow, as some long-term holders chose to take profits or obtain liquidity after the price rebound. Although whales continue accumulating (100,000 ETH, worth about $470 million), fund allocation from rotation behavior created a liquidity gap in the short term.

In addition, the capital rotation from BTC to ETH generated a linkage effect in the short term. When whales sell BTC to buy ETH, selling pressure in the BTC market weakens overall crypto market sentiment, indirectly pressuring ETH price. Stop-loss orders from algorithmic trading were triggered near key technical levels, further amplifying the downside.

Volatility risk remains. The key support level around $1,740 needs attention; if breached, it may trigger a new round of algorithmic/programmatic sell-offs. On-chain fund flows, changes in net exchange inflows, and the progress of position rebuilding after the July 3 mass liquidation are still the core short-term indicators to monitor.