Ethereum Price Analysis

Ethereum’s price has recently experienced a massive drop, arriving earlier than expected, as ETH has failed to achieve a new all-time high like Bitcoin.

Yet, the bull market for the second-biggest crypto might not have begun yet.

Technical Analysis

By Edris Derakhshi (TradingRage)

The Daily Chart

On the daily chart, it is clear that the price has been making lower highs and lows since December 2024 after failing to surpass the $4,000 resistance level. The 200-day moving average, currently around the $2,900 mark, has also been breached, resulting in ETH losing over a third of its market capitalization.

However, the market rebounded significantly yesterday, bouncing from the $2,100 support zone and breaking above the $2,400 level. Still, for a new bullish trend to start, the price would need to climb back above the 200-day moving average, or this might just be another bull trap.

The 4-Hour Chart

The 4-hour chart shows a clearer picture of recent price actions, as ETH might be experiencing a V-shaped recovery. Yesterday’s price jump came with considerable momentum, making it easy to break the $2,400 level.

However, this area is currently being re-tested as the asset pulls back to find support. If the $2,400 level holds, the price could rise toward the $2,700 resistance level in the coming days.

Sentiment Analysis

By Edris Derakhshi (TradingRage)

Short Liquidations

While it usually takes time for the futures market to overheat during bull runs, the same cannot be said for crashes. During the recent decline, many futures traders opened leveraged short positions to capture quick profits from the drop. However, this led to a price spike yesterday.

A chart illustrates the total amount of short liquidation in ETH across all centralized exchanges. It shows that the market has experienced significant short liquidation cascades, the largest in recent years.

The automatic closure of these short positions adds to the buying pressure in the futures market, likely driving yesterday’s price bounce. However, for a new bull trend to begin, it is essential for the market to continue rising on spot demand.