Ethereum’s exit queue spikes after 5% pullback – Are ETH bulls in trouble?

Mixed signals create uncertainty, leaving traders on edge.

These conflicting signals naturally amplify indecision, triggering liquidity sweeps, short-term swings, and forced liquidations. From a technical standpoint, this sets up a feedback loop: Liquidity sweeps fuel more selling, eroding market sentiment and pushing participants deeper into fear.

Ethereum [ETH] appears to be following this exact pattern. On the 26th of March, a 5% single-day decline marked its worst daily close since the West Asian conflict began. Bulls failed to reclaim $2.2k, leaving the $2k floor under renewed pressure and reinforcing the bearish technical setup.

Notably, the very next day triggered a massive liquidity outflow.

According to CoinGlass, Ethereum’s daily liquidations hit around $112 million, with over 90% coming from long positions. In fact, this marked the largest long squeeze in nearly ten days, showing how technical resistance quickly cascaded into forced selling.

Moreover, the stress didn’t stop at price action. 

Lookonchain shows an Ethereum OG unstaked after four years, selling 7,302 ETH at $2,073. At the same time, Ethereum’s validator exit queue jumped from 288 to 63k in less than a week. For context, a rising exit queue signals that more validators are rushing to withdraw staked ETH, reflecting growing caution.

Taken together, these moves show how technical weakness, liquidations, and on-chain activity feed into a reinforcing bearish cycle for ETH. Naturally, the question becomes: With confidence slipping, is Ethereum at risk of a deeper breakdown?

Liquidations and outflows signal Ethereum’s deleveraging phase

One Ethereum leveraged position perfectly illustrates the current market dynamics. 

According to Lookonchain,  machibigbrother’s ETH longs were fully liquidated yet again. He had deposited 500k USDC just three days ago, but after a series of liquidations, only $138k remains, with total losses now totaling $30.75 million. And yet, he didn’t step back, immediately opening another 25x long on 1,600 ETH, worth roughly $3.33 million.

From a behavioral perspective, this highlights classic high-risk trading: the chase for quick gains often overrides disciplined positioning, piling more pressure onto Ethereum’s already fragile setup. However, on-chain metrics reveal a critical conflicting signal.

Notably, ETH on exchanges has dropped to a 10-year low, the lowest amount since 2016, nearly the entirety of Ethereum’s lifetime. Outflows aren’t slowing either. Over the past few months, net withdrawals have been consistent, with a massive $1.67 billion removed from exchanges on the 22nd of March.

According to AMBCrypto, this is a textbook deleveraging setup.

Leveraged traders chasing short-term upside amplify volatility, while the shrinking exchange supply points to longer-term scarcity. The interplay forms a feedback loop: forced liquidations shake out overleveraged longs, clearing the market and setting the stage for a potential rebound. 

In this context, once selling pressure eases and liquidity stabilizes, the reduced supply could give bulls room to push ETH higher, with $2.5k firmly on the table.

Final Summary

• Mixed signals, a 5% pullback, and rising validator exits are reinforcing Ethereum’s technical weakness and market fear.
• Exchange outflows hit a 10-year low, clearing overleveraged longs and setting the stage for bulls to push ETH toward $2.5k once selling pressure eases.