Home Altcoins News Ethereum Faces Major Liquidations Amid Market Crash

Ethereum Faces Major Liquidations Amid Market Crash

Ethereum Market Crash

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, is currently facing one of the largest liquidations it has experienced since the infamous COVID market crash in 2020. The recent downturn has been severe, with $2.3 billion worth of liquidations in the past 24 hours alone. Ethereum alone accounted for $615 million of those liquidations, highlighting the pressure the altcoin is currently under.

This massive sell-off has caused Ethereum’s price to plummet from around $3,000 to an alarming low of $2,100. However, a short-term recovery has allowed ETH to bounce back above the $2,500 level, maintaining a market cap of around $311 billion. This volatility has left many wondering if this price dip could present a buying opportunity, despite the bearish market sentiment.

Ethereum Technical Analysis: Struggling at Key Support Levels

Looking at Ethereum’s technical indicators, it is evident that the cryptocurrency is facing significant resistance. In the daily chart, Ethereum has formed three consecutive red candles, signaling a persistent downward trend. The price struggled to overcome the 50-day Exponential Moving Average (EMA) and a local resistance trendline, causing a steep drop from $3,320 to a 24-hour low of $2,120.

This price movement resulted in a breakdown of the local support trendline, and Ethereum partially breached the $2,395 swing low. While there was a quick bounce back thanks to the psychological support levels near $2,100, the overall technical outlook remains bearish. The exponential moving averages (EMAs) are showing negative crossovers between the 50-100 EMA lines and the 20-200 EMA lines. This is further compounded by the Relative Strength Index (RSI), which has fallen to oversold levels, signaling an increase in selling pressure.

For Ethereum to find a reversal, support levels are likely to be located at $2,395 and $2,223. If ETH can regain momentum, the next price targets lie between $3,000 and $3,500. However, these levels seem difficult to overcome given the current bearish trend.

1inch Fund’s Bold Move Amid Market Chaos

Despite the ongoing downturn, some institutional investors are still showing confidence in Ethereum. The 1inch investment fund, for example, has made a significant purchase amid the market crash. The fund recently accumulated 7,357 ETH, worth approximately $21 million, at an average price of $2,800 per coin. This move demonstrates that even in the face of market volatility, some investors remain optimistic about Ethereum’s long-term prospects.

Additionally, the fund also acquired Wrapped Bitcoin (WBTC), worth $5 million, further reinforcing its belief in the potential for major cryptocurrencies to recover over time.

Analyst Outlook: Is a Reversal Rally Possible?

Despite the ongoing market crash, some analysts are optimistic about Ethereum’s future. According to crypto analyst Ali Martinez, Ethereum may be forming an inverted head-and-shoulder pattern, a technical formation often associated with price reversals. Martinez highlights that if Ethereum can sustain its price above $2,700, it could break above the bullish pattern’s neckline at $4,000. This would open the door for a further price increase, with potential targets extending to as high as $7,000 based on Fibonacci retracement levels.

However, Ethereum faces substantial challenges in overcoming the incoming supply waves and local resistance levels. To begin a reversal, Ethereum must reclaim the $3,000 psychological level and break through the $3,185 resistance mark.

Conclusion

Ethereum is currently navigating one of its most turbulent periods in recent history, with massive liquidations driving its price lower. Despite this, key institutional players like the 1inch investment fund continue to show confidence in Ethereum’s long-term potential.

While technical indicators suggest a continued bearish trend in the short term, a potential reversal could occur if Ethereum manages to break through key resistance levels and recover its upward momentum. Whether this current dip presents a buying opportunity largely depends on how the market reacts in the coming days. With key support levels still holding, investors and traders alike are watching closely for any signs of a reversal.

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Maheen Hernandez

A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5

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