Ethereum (ETH), recognized as the world’s second-largest cryptocurrency by market capitalization, is currently exhibiting signs of a potential sell-off. This development suggests a possible price decline in the days ahead. Over the last three days, the sentiment within the cryptocurrency market has notably shifted towards bearishness, resulting in a significant drop in ETH’s price.
Ethereum (ETH) Technical Analysis and Upcoming Levels
The recent downward trend in Ethereum’s price is anticipated to persist, as the cryptocurrency has formed a bearish price pattern on the daily chart. Expert technical analysis indicates that ETH has broken out of a bearish Head-and-Shoulders pattern, breaching a critical support level at $3,250. This breakdown has led traders to adopt short positions, potentially impacting Ethereum’s price trajectory in the near future.
Historically, the $3,250 support level has been a formidable floor for ETH over the past three months, consistently providing stability when market sentiment turned bearish. However, this time, Ethereum has failed to maintain this level. If ETH closes a daily candle below the $3,200 mark, there is a high likelihood of an 11% decline, pushing the price down to the $2,850 support level.
Bearish On-Chain Metrics
This bearish sentiment has prompted traders to take short positions, as reported by the on-chain analytics firm Coinglass. Currently, the ETH long/short ratio is at 0.884, reflecting a strong bearish outlook among traders. Furthermore, data reveals that 53.07% of top traders hold short positions, while 46.93% are maintaining long positions.
Major Liquidation Levels
Key liquidation levels have also emerged in the current market scenario. The significant liquidation zones are identified at $3,185.5 on the downside and $3,361.9 on the upside. Traders are heavily over-leveraged at these levels, as indicated by the ETH exchange liquidation map. If the bearish sentiment persists and the price falls to the $3,185.5 level, approximately $261.01 million worth of long positions could face liquidation. Conversely, if sentiment shifts and prices rise to $3,361.9, around $708.16 million in short positions may be liquidated.
This data underscores the strong bearish sentiment in the market, with short positions created by sellers significantly outweighing the long positions maintained by buyers.
Current Price Momentum
At present, Ethereum (ETH) is trading around $3,225, having experienced a price decline of over 1.65% in the past 24 hours. During this period, its trading volume has decreased by 29%, indicating reduced engagement from traders and investors. This declining volume may further reinforce the bearish sentiment and influence upcoming price movements.
As Ethereum navigates these challenging market conditions, traders and investors should remain vigilant and stay informed about the latest technical indicators and market trends to make well-informed decisions.
