Despite the turbulence seen in the global financial markets, Ethereum (ETH) investors are currently experiencing their own moment of reckoning. The world’s second-largest cryptocurrency by market capitalization is teetering on a critical precipice, according to recent technical analysis.
Based on a four-hour time frame, Ethereum appears to be forming an ascending triangle pattern, seen as a bullish indicator by many investors. However, the altcoin is currently facing resistance from the descending trendline, causing it to veer towards the pattern’s support level.
Should Ethereum fail to maintain its hold at the $2,680 level and closes a four-hour candle below $2,670, expert analysis suggests it could experience a 4.5% drop to the $2,560 level in the coming days.
Adding to the bearish perspective, Ethereum is currently trading below the 200-day Exponential Moving Average (EMA) on the daily time frame. This is typically seen as a clear indication that the asset is in a downtrend, with the potential to continue this bearish trend in the foreseeable future.
In the midst of this bearish outlook, intraday traders are on high alert as $74 million worth of long positions are on the brink of liquidation. Data indicates that a notable $72 million worth of long positions were initiated when traders became over-leveraged at the $2,657 level. This considerable sum of Ethereum could face liquidation if the price falls below this over-leveraged level.
On the flip side, traders holding long positions are also over-leveraged at the $2,730 level. A staggering $275 million worth of long positions is at risk of liquidation if the price continues to decline.
Currently, Ethereum is trading near the $2,685 level and has seen a relatively small price drop of 0.55% over the last 24 hours. However, within the same period, its trading volume has decreased by 9%. This suggests reduced participation from traders and investors, potentially heralding a period of decreased market activity.
As the Ethereum market hangs in the balance, investors worldwide will undoubtedly be watching closely to see if the altcoin can hold its ground or if it will succumb to the bearish trend. One thing is certain: in the fast-paced world of cryptocurrency, nothing is ever guaranteed.
