In the past several hours, Bitcoin and Ethereum experienced a downturn following their recent highs at approximately $42,000 and $2,300. Analysis of on-chain data indicates that short-term investors are taking this chance to sell their holdings and exit the market with gains. Despite this, strengthening support levels suggest that Ethereum’s price is poised for a recovery and likely to resume its upward trend.
Bulls Liquidated $3.5 Million Worth Of Positions
ETH price faced resistance slightly under $2,300, leading to a wave of sell-offs by investors eager to secure their profits from the recent rally. According to Coinglass data, short-term traders sold off more than $3.5 million in long positions following the price’s failure to maintain its upward momentum. Consequently, ETH’s value dipped just below the immediate Fibonacci retracement levels.
In a recent statement by Santiment, a prominent on-chain analytics company, it was noted that Ethereum’s market value has surged, reaching $2,250 for the first time in over one and a half years. This significant milestone brings an increase in open interest and long positions in the Ethereum market.
Santiment highlighted that this trend is indicative of a growing sense of FOMO traders. While there is potential for further price increases, on-chain data cautioned that the market is also facing increased risk of a correction. This is primarily due to traders engaging in increasingly leveraged positions driven by greed, which could lead to greater market volatility and potential corrections.
Despite the recent dip, the downturn appears to be a temporary setback, as the price of ETH showed a strong refusal to fall further and bounced back quickly. The long-short ratio has surged past 1, currently trading at 1.2012, indicating that 55% of holders are now anticipating a rise in price. On the other hand, bears are putting up a strong resistance, with 45% holding short positions.
What’s Next For ETH Price?
Ether recently experienced a strong recovery from its 23.6% Fib channel after sellers failed to plunge the price below $2,200, showing that buyers are actively defending this price level. However, buyers are facing resistance to push the price beyond $2.3K. As of writing, ETH price trades at $2,217, surging over 3% from yesterday’s rate.
Looking forward, the bulls will attempt to drive the price towards the significant overhead resistance at $2,464, a crucial level to monitor in the short term. A successful break through this resistance could complete an ascending triangle pattern, a bullish indicator. The completion of this pattern could set a target price around $2,800.
On the flip side, the 20-day EMA serves as a critical support level. If the price falls below this, it will signal a weakening of the bullish momentum. Such a break could potentially lead to a decline towards the crucial $2,000 mark.