Ethereum suffered large-scale liquidations over the past 24 hours, sharply derailing its recent recovery attempt.

On Oct. 15, Cryptopolitan reported that more than $157 million worth of Ethereum positions were closed on Binance alone. It also said the most pronounced hourly liquidations in the past six months occurred.

The liquidations highlighted vulnerabilities in an increasingly leveraged Ethereum futures market. Across the broader market, Ethereum liquidations totaled $292 million over 24 hours, and about $200 million worth of bitcoin was also liquidated. Positions in risk zones were closed all at once in a short period, snapping the recent rebound momentum.

After the liquidations, Ethereum's price at one point slipped to $2,362.43. Ethereum rose 74.6 percent in the third quarter and maintained a relatively strong run for several weeks, but the pullback quickly cooled sentiment.

Price indicators also tilted bearish. Ethereum fell more than 8 percent over the past week, a bigger drop than bitcoin. The crypto fear and greed index fell to 29, entering the fear zone. Market sentiment retreated to its lowest level since July, even though prices had been higher.

The price levels where liquidations concentrated were also clear. Ethereum swept liquidity below $2,500 and then triggered additional liquidations in the $2,300 range. In contrast, the liquidation heatmap shows new short positions building toward $2,600. This area leaves room for a short squeeze if prices rebound quickly.

Strains in the derivatives market also increased. Since October, Ethereum liquidity has fallen and open interest declined from near $20 billion to $15 billion. Still, the liquidation heatmap shows new short positions building around $2,600.

U.S. inflation data were cited as a direct trigger. Analyst Darkfrost said the Ethereum market reacted to news of a widening rise in the U.S. consumer price index (CPI) for September. He pointed to rising gasoline and energy costs as pushing inflation higher.

Future variables are also focused on the derivatives market. A significant portion of available liquidity is tied up in short positions. With many existing long positions closed after the recent sharp drop, there is room for a short-term rebound if Ethereum quickly recovers price levels. In fact, whales described as smart money bought Ethereum on the spot market and then withdrew it from Binance during the recent decline.

Still, the near-term outlook remains cautious. With market sentiment subdued, the possibility of further declines remains, and some see prices potentially testing below $2,000 in the short term. Ultimately, Ethereum's next direction is likely to be decided by whether spot buying continues or whether another round of liquidations hits the derivatives market.