Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, is currently exhibiting indicators of a potential sell-off. This suggests a significant price decline might be on the horizon in the coming days. Recently, the sentiment within the cryptocurrency market has notably tilted towards the bearish side, resulting in a substantial drop in Ethereum’s price.
Ethereum (ETH) Technical Analysis and Upcoming Levels
The recent downtrend in Ethereum’s price is anticipated to persist as it has displayed bearish price actions on its daily chart. Expert technical analysis points out that Ethereum has exited a bearish Head-and-Shoulders pattern and has broken through a critical support level at $3,250.
This breach of support has motivated traders to adopt short positions, which could further affect ETH’s price movements in the near future. Historically, the $3,250 level has served as a crucial support for Ethereum over the last quarter, consistently acting as a safeguard whenever market sentiment leaned bearish.
However, this time, Ethereum has been unable to maintain this level. According to recent price action, if Ethereum closes a daily candle below the $3,200 mark, there is a strong likelihood of an 11% decline, potentially bringing it down to the $2,850 support level.
Bearish On-Chain Metrics
The current bearish outlook has prompted many traders to take short positions, as highlighted by on-chain analytics firm Coinglass. The ETH long/short ratio is presently at 0.884, clearly indicating strong bearish sentiment among traders. Moreover, data shows that, at the time of writing, 53.07% of top traders are holding short positions, while 46.93% are maintaining long positions.
Major Liquidation Levels
Additionally, significant liquidation zones have been identified at the $3,185.5 level on the downside and $3,361.9 on the upside, with traders heavily over-leveraged in these areas, as indicated by the ETH exchange liquidation map.
If the current sentiment persists and the price falls to the $3,185.5 level, nearly $261.01 million worth of long positions will face liquidation. Conversely, should the sentiment shift favorably and the price climb to $3,361.9, approximately $708.16 million in short positions could be liquidated.
This data underscores that the volume of short positions held by sellers significantly exceeds the long positions by buyers, reinforcing the prevailing strong bearish sentiment.
Current Price Momentum
As of now, Ethereum is trading close to the $3,225 mark, having experienced a price reduction exceeding 1.65% over the past 24 hours. However, during the same timeframe, its trading volume has plummeted by 29%, reflecting a decrease in trader and investor participation.
In conclusion, Ethereum appears to be navigating through a bearish phase, with technical indicators and market sentiment pointing towards further possible losses. Traders and investors should remain vigilant and closely monitor these developments to make informed decisions.
