Ethereum Drops Sharply Amid Significant Liquidation Wave
By: Isha Das
The cryptocurrency market faced a massive downturn as Ethereum's price nosedived following an unprecedented liquidation wave, resulting in a loss of over 18% of its value. This dramatic crash is part of a larger trend where approximately $2.3 billion in crypto assets were liquidated, heavily impacting Ethereum. Ethereum alone witnessed $611 million in liquidations, both from long and short positions, highlighting its volatility and the unpredictable nature of the crypto market.
Ethereum, often compared to Bitcoin in terms of market capitalization, started its descent from the $3,000 support zone, plummeting over 25% and falling short of the $2,120 mark. This decline has brought the token to the verge of a bearish zone, trading below the $2,800 mark and the crucial 100-hourly simple moving average (SMA). Despite a minor recovery attempt climbing past $2,300, resistance remains formidable around the $2,770 level.
Technical indicators suggest that Ethereum is struggling to surpass key resistance hurdles. A bearish trend line has formed with significant resistance appearing near the $2,900 level on the ETH/USD hourly chart. This area continues to resist upward moves, with potential further declines looming if Ethereum fails to breach the $2,600 resistance. Analysts remain cautious, noting that any inability to rebound above the $2,200 level may lead to further losses, possibly testing sub-$2,000 levels.
Investors are now closely watching Ethereum's price movements, with major support established at $2,200. Technical indicators such as the MACD and RSI are both retracing in bearish territories, underscoring the potential challenges for recovery. Given the scale of recent liquidations, market participants are wary about the potential for another downtrend. However, a successful breach above $3,000 could see Ethereum rallying back towards $3,150 and beyond, warding off bearish momentum and potentially setting the stage for a broader recovery.
