Ethereum faces rejection as bulls liquidate $3.5 million in positions! Is ETH price set to adjust?
Over the past few hours, Bitcoin and Ethereum have been experiencing declines following recent highs of around $42,000 and $2,300. Analysis of on-chain data shows that short-term investors are using this opportunity to sell their holdings and exit the market at a profit. Nonetheless, the strengthened support level suggests that the Ethereum price is ready to recover and is likely to resume its upward trend.
The Bulls liquidated positions worth $3.5 million.
ETH price faced resistance below $2,300, leading to a wave of selling by investors looking to take profits from the recent uptrend. Short-term traders sold more than $3.5 million from long positions as prices failed to maintain upward momentum, according to Coinglass data. As a result, the value of ETH fell just below the immediate Fibonacci retracement level.
A recent statement from Santiment, a prominent on-chain analytics firm, noted that Ethereum’s market value has surged, reaching $2,250 for the first time in a year and a half. This important milestone results in an increase in open interest and long positions in the Ethereum market.
Santiment emphasized that this trend indicates a growing awareness among traders of FOMO. While further price increases are likely, on-chain data warns that the market is also at increasing risk of a correction. This is mainly because traders are engaging in more and more leveraged positions out of greed, which can lead to greater market volatility and potential corrections.
Despite the recent decline, the decline appears to be a temporary setback, with ETH price refusing to decline any further and rebounding quickly. The long/short ratio has surged past 1 and is currently trading at 1.2012, indicating that 55% of holders are currently expecting the price to rise. On the other hand, the downtrend is showing strong resistance, with 45% maintaining short positions.
What’s next for ETH price?
Ether recently experienced a strong recovery from the 23.6% Fib channel after sellers failed to drive the price below $2,200, showing that buyers are actively defending this price level. But buyers are facing resistance to raise the price above $2,300. At the time of writing, the price of ETH is trading at $2,217, up more than 3% from yesterday’s price.
Going forward, the bulls will attempt to push the price towards significant overhead resistance at $2,464, which is an important level to monitor in the near term. A successful break above this resistance could lead to the completion of an ascending triangle pattern, a bullish indicator. If this pattern is completed, the target price could be set around $2,800.
On the other hand, the 20-day EMA serves as an important support level. If the price falls below this, it is a sign that the bullish momentum is waning. Such a breakout could potentially lead to a decline towards the important $2,000 level.