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 โ Possible liquidation of $261.01M worth of long positions.
Upper Side: $3,361.9 โ 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.
Whatโs Next for Ethereum?
With bearish patterns forming and key support levels breached, traders should prepare for increased volatility. Hereโs 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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๐ 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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