Ethereum’s price has experienced a recent drop, falling over 6% in the last 24 hours and hovering around the $4,200 mark. This near-term dip poses a potential risk for traders with leveraged positions. Over $2 billion in long ETH positions stand vulnerable to liquidation if prices fall below the key support level of $4,200. As per Cipher X analysis, this could trigger a cascade of forced selling across various exchanges. 📈
Beyond the immediate price concerns, market sentiment also remains uncertain. Institutional short positions on Ethereum have reached record highs and are creating tension between spot demand for the cryptocurrency and futures positioning. This highlights that even though ETH has managed to break above the $4,000 mark this past week, there is still uncertainty regarding its long-term trajectory.
Analysts also highlight key support levels around $4,240-$4,190, with resistance at the $4,550-$4,571 zone. These levels will be crucial in determining future price action. However, a significant break through the resistance could potentially push ETH towards even higher prices.
Several market-moving events are expected to occur this week. FOMC minutes on Wednesday, US jobless claims on Thursday and Fed Chair Jerome Powell’s remarks on Friday all hold potential impact on the cryptocurrency’s trajectory. Additionally, the ongoing meeting between Donald Trump and President Zelensky is a significant factor that may impact global markets.
With these events looming and the potential for liquidity risk, traders are bracing for volatility in the Ethereum market.