Ethereum (ETH), the second-largest cryptocurrency by market cap, is navigating stormy waters as bearish signals dominate the market. Following a noticeable shift in sentiment over the last three days, ETH has broken critical support levels, setting the stage for a potential sell-off.

Technical Breakdown: Bearish Momentum Gathers Pace

ETH recently breached the $3,250 support level, which had acted as a strong price floor for the past three months. This breakdown also aligns with the completion of a bearish Head-and-Shoulders pattern on the daily chart, signaling the possibility of further declines.

If Ethereum closes a daily candle below $3,200, analysts predict a significant 11% drop, potentially targeting the $2,850 support zone.

Key Levels to Watch:

Immediate Resistance: $3,250

Next Support: $2,850

On-Chain Metrics Confirm Bearish Sentiment

According to Coinglass, bearish sentiment dominates the market.

ETH Long/Short Ratio: 0.884, indicating a higher volume of short positions.

Top Trader Sentiment: 53.07% short positions vs. 46.93% long positions.

This overwhelming bearish outlook is further confirmed by liquidation data.

Major Liquidation Levels:

Lower Side: $3,185.5 – Possible liquidation of $261.01M worth of long positions.

Upper Side: $3,361.9 – Potential liquidation of $708.16M worth of short positions.

Market Momentum & Trading Volume

ETH is currently trading around $3,225, having dropped 1.65% in the last 24 hours. However, trading volume has declined by 29%, suggesting reduced activity from traders and investors.

What’s Next for Ethereum?

With bearish patterns forming and key support levels breached, traders should prepare for increased volatility. Here’s what to watch:

1. Daily Close Below $3,200: A confirmed breakdown could pave the way for a drop to $2,850.

2. Liquidation Hot Zones: Monitor the $3,185.5 and $3,361.9 levels for potential market moves.

3. Volume Trends: Reduced trading activity could signal hesitation, making ETH more susceptible to sharp price swings.

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🚀 Binance Pro Tip

Stay agile and manage your risk! For short-term traders, consider leveraging tight stop-loss orders around $3,250 to secure profits or minimize losses. Long-term holders may focus on dollar-cost averaging at lower levels like $2,850.

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