According to CryptoPotato, Ethereum has recently seen a surge in selling activity, leading to a breach of the 100-day moving average and a significant decline towards the 200-day moving average. This breach, which occurred in an area filled with buying interest and demand, led to a notable long liquidation cascade, accelerating the bearish momentum. Consequently, the price plummeted towards the substantial 200-day moving average of $3096 and breached it, indicating a bearish sentiment in the market.
In the short term, Ethereum is currently hovering around the crucial and decisive support region of $3K and is expected to undergo a period of consolidation before initiating its next major move. If a pullback to the broken 200-day MA occurs, the continuation of the bearish trend will become more likely.
The 4-hour chart reveals that after a period of sideways consolidation above the $3.3K support, the price faced aggressive selling activity and breached this crucial support region. This breakout led to a notable impulsive downtrend, indicating a long-squeeze event in the perpetual markets. However, Ethereum has landed on the substantial support region of $3K, which has previously supported the price multiple times. This area is likely filled with demand, potentially halting the downward pressures in the short term.
Ethereum has recently seen a rise in selling activity, leading to a significant decline toward the critical $3K support zone. The chart indicates a notable liquidity pool below the crucial $3K. This pool is filled with sell-stop orders from aggressive long positions that contributed to a significant price surge in mid-May. If sellers push the price below the $3K support zone, a massive long-squeeze is expected. This would trigger the sell-stop orders, accelerating the bearish momentum. Traders should closely monitor the price action around the $3K support zone in the upcoming days to determine the cryptocurrency’s trend direction.