ETH Price Dips to $2900: Trader Faces Major Liquidation and Re-Enters Long Position

In a sudden shift from the weekend's relative calm, Ethereum (ETH) experienced a sharp decline, dropping to the $2900 level, according to Ai 姨 on December 7, 2025. This price movement triggered significant liquidations across the market, with one prominent trader, often referred to as 'Majigi,' suffering a substantial loss. His ETH long position was forcefully closed out due to the price wick, resulting in a remaining holding of 7250 ETH and a realized loss of $738,000. Despite this setback, the trader quickly re-entered the market by opening a new long position of 2100 ETH, valued at approximately $6.18 million at the time. This move reduced his account balance, which had recently recovered to $3 million, down to just $227,000, raising questions about whether further capital injections will be needed to sustain his strategy.

The incident highlights the volatile nature of ETH trading, where sudden price wicks—brief but sharp movements—can lead to cascading liquidations. At the time of the report, ETH's drop to $2900 represented a critical support level that many traders monitor closely. Historical data shows that $2900 has acted as a psychological barrier in previous corrections, often serving as a point of accumulation for long-term holders. For traders, this event underscores the risks of leveraged positions in cryptocurrency markets, where high volatility can amplify both gains and losses. The trader's decision to immediately reopen a long position suggests a bullish conviction, potentially betting on a rebound amid broader market sentiment. However, without real-time data confirming a recovery, such moves carry inherent risks, especially if ETH fails to hold above key support zones like $2800-$2900.

Analyzing ETH Market Indicators and Trading Opportunities

From a trading perspective, this ETH price action on December 7, 2025, aligns with increased weekend volatility often seen in crypto markets due to lower liquidity. Trading volumes during such periods can spike dramatically during wicks, leading to over $100 million in liquidations across platforms, as reported in similar past events. For ETH specifically, on-chain metrics like active addresses and transaction volumes could provide clues to underlying strength. If ETH stabilizes above $2900, it might signal a potential reversal, with resistance levels at $3100 and $3200 becoming viable targets for short-term traders. Conversely, a breakdown below $2900 could open the door to further downside, possibly testing $2600, a level supported by historical moving averages such as the 200-day EMA.

Institutional flows play a crucial role here, with Ethereum's role in decentralized finance (DeFi) and layer-2 scaling solutions driving long-term interest. Traders looking for opportunities might consider ETH/USD or ETH/BTC pairs on major exchanges, monitoring indicators like RSI (Relative Strength Index) for oversold conditions—potentially dipping below 30 during the wick—and MACD crossovers for momentum shifts. The trader's repeated long entries despite losses illustrate a high-risk strategy, possibly influenced by overall crypto market correlations with Bitcoin (BTC), which often dictates ETH's direction. For retail traders, this serves as a reminder to use stop-loss orders and manage leverage carefully to avoid similar liquidations.

Broadening the analysis, this ETH dip could correlate with stock market movements, particularly in tech-heavy indices like the Nasdaq, where AI and blockchain integrations influence sentiment. If traditional markets show resilience, it might bolster ETH's recovery, presenting cross-market trading opportunities such as hedging ETH longs with stock shorts. Ultimately, while the immediate narrative centers on this trader's perseverance, the event emphasizes the need for data-driven decisions in ETH trading, focusing on verified metrics to navigate volatility effectively.