Ethereum (ETH), the world's second-largest cryptocurrency by market capitalization, has issued a sell signal, suggesting a significant price decline in the coming days. Over the past three days, sentiment across the crypto industry has shifted significantly to the bearish side, leading to significant price declines.
Ethereum (ETH) technical analysis and future levels
However, this price decline is expected to continue as ETH is forming bearish price action on the daily time frame. According to expert technical analysis, ETH broke out of a bearish head-and-shoulders pattern and broke through the key support level at $3,250.
A break in this bearish price trend will prompt traders to move into short positions, which could impact ETH price in the coming days. Historical data shows that $3,250 has been a strong support level for ETH over the past three months, consistently providing a floor whenever market sentiment turned bearish.
However, this time, altcoins were unable to maintain this level. Based on recent price movements, if ETH closes the daily candlestick below the $3,200 level, it is likely to fall 11% and reach the $2,850 support level.
Bearish on-chain indicators
The bearish outlook has prompted traders to take short positions, according to a report from an on-chain analytics firm. coin glass. Currently, ETH long/short ratio is 0.884, indicating strong bearish sentiment among traders. Furthermore, the data reveals that at the time of writing, 53.07% of top traders held short positions and 46.93% held long positions.
large liquidation level
Furthermore, as evident in the ETH exchange liquidation map, the main liquidation areas are at the lower $3,185.5 and upper $3,361.9 levels, with traders significantly overleveraged at these levels.
If the current sentiment remains unchanged and the price falls to the $3,185.5 level, approximately $261.01 million worth of long positions will be liquidated. Conversely, if sentiment changes and the price rises to the $3,361.9 level, then approximately $708.16 Million worth of short positions would be liquidated.
The data reveals that short positions created by sellers are more than twice as large as long positions held by buyers, indicating strong bearish sentiment.
Current price momentum
ETH is currently trading around $3,225, experiencing a price decline of over 1.65% in the past 24 hours. However, over the same period, trading volumes declined by 29%, indicating reduced participation by traders and investors.
