Ethereum (ETH) Blinking Sell Signal, Next Target $2,850?
Ethereum (ETH), the world's second largest cryptocurrency by market cap, is flashing a sell signal, hinting at a significant price drop in the coming days. Over the past three days, sentiment across the cryptocurrency landscape has shifted dramatically to the bearish side, leading to significant price declines.
Ethereum (ETH) technical analysis and upcoming levels
However, this price decline is expected to continue as ETH has established a bullish trend on the daily timeframe. According to expert technical analysis, ETH broke out of the bearish head and shoulders pattern and breached the critical support level at $3,250.
The breakdown of this bearish price action has pushed traders into short positions, which could impact the price of ETH in the coming days. Historical data indicates that $3,250 has been a strong support level for ETH over the past three months, consistently providing a floor whenever market sentiment turns bearish.
However, this time, the altcoin could not hold this level. Based on the recent price action, if ETH closes the daily candle below the $3,200 level, there is a high probability of an 11% decline, taking the $2,850 support level.
Bearish On-Chain Indicators
This bearish outlook prompted traders to take short positions, according to the chain analysis firm CoEnglas. Currently, the long/short ratio of ETH stands at 0.884, indicating strong bearish sentiment among traders. The data also shows that, as of press time, 53.07% of top traders are holding short positions, while 46.93% are holding long positions.
Main fluid levels
In addition, the main liquidity positions are at the $3,185.5 level on the lower side and $3,361.9 on the upper side, traders are very overextended at these levels as shown in the ETH exchange liquidity map.
If the current sentiment doesn't change and the price drops to the $3,185.5 level, about $261.01 million worth of long positions will be lost. Conversely, if sentiment were to reverse and the price would rise to the $3,361.9 level, approximately $708.16 million worth of short positions would be lost.
This data shows that short positions created by sellers are twice as large as long positions held by buyers, indicating strong bearish sentiment.
Current price momentum
Currently, ETH is trading near $3,225, having gained more than 1.65% in the last 24 hours. However, during the same period, the transaction volume decreased by 29 percent, indicating a decrease in the participation of traders and investors.
