Bitcoin and Ethereum continue to experience price drops in recent hours, marking a bearish start to the week. While this could be a standard correction ahead of a bull run, similar to patterns observed in past bull markets, there is growing worry about whale investors selling for profit, potentially postponing the anticipated bull phase. Ethereum, in particular, is facing increased liquidations and is approaching a critical support level to test.
ETH Price Prepares To Test $2,100
According to Coinglass, there has been a significant increase in the liquidation of long positions as the price of Ethereum fell sharply from $2,250. In the past three hours alone, long positions valued at over $6.6 million were liquidated as investor confidence declined following the drop from $2,250. In the same vein, Bitcoin also experienced over $15 million in long position liquidations, indicating an ongoing sell-off and the potential for further price declines.
Interest from whale investors in Ethereum has declined, with large-scale transactions reaching a one-month low. IntoTheBlock reports a sharp decrease in the number of large transactions, following the downturn in Ethereum’s price. Currently, this metric stands at around 2.65K transactions.
Interestingly, as Ethereum’s price drops, some investors see this as an opportune moment to increase their holdings. Data from CryptoQuant shows that Ethereum’s Netflow is negative, indicating that the outflow of coins from exchanges is exceeding the inflow. This trend suggests that despite the falling prices, exchange reserves of Ethereum are declining as investors withdraw their ETH to start holding from the recent dip.
This trend could notably strengthen the immediate support levels as Ethereum’s price approaches a test of the $2100 mark. At present, the market sentiment is largely bearish, as indicated by the long/short ratio standing at 0.8692. This shows that 53.5% of positions are anticipating a decrease in price. On the other hand, 46.5% of positions remain bullish, maintaining a bullish outlook despite the increasing selling pressure.
What’s Next For ETH Price?
There is an attempt by bearish traders to push Ethereum’s price below the critical breakout level of $2,200, but the bullish investors are defending this level. This indicates an effort by buyers to establish $2,200 as a new support level.
The ETH price is flashing extreme volatility near $2.2K as buyers attempt to send the price above EMA20. To regain positions, ETH price needs to hold within $2,400 and break above the resistance at $2,464. However, sellers are expected to defend this level aggressively.
The key support zone to watch is between $2,200 and $2,100. A decline below this support zone could trap some of the more aggressive bullish traders, potentially leading to a wave of long position liquidations. Such a scenario could trigger a sharp correction, possibly driving the price down toward $1,900.
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