- The price of Ethereum hovered around $2,600 as the cryptocurrency market experienced a short pause.
- A CryptoQuant analyst has indicated that ETH may experience a short squeeze, but identified $2.7k as a crucial resistance level.
Ethereum touched nearly $2,750 on Monday, Oct. 21, gaining ground alongside broader swings in the crypto market with Bitcoin surpassing $69,000. However, as BTC retraced, ETH followed and tested support close to $2,600 on Oct. 22.
Ethereum’s price has reclaimed levels above $2,620, and a CryptoQuant analyst suggests that the leading altcoin might be on the verge of a short squeeze. As per Shayan B, this projection stems from an uptick in leverage. Should the bulls succeed in breaching the resistance around $2.7k, further upward momentum for ETH could follow.
Outlook for Ethereum’s Price
At present, sentiment in the market appears bearish regarding ETH’s price, with many traders anticipating a continuation of the downturn. Nevertheless, with leverage at elevated levels, any short squeeze might spur an unforeseen price rally and significant liquidations.
Such a scenario could yield gains for ETH.
“Given that leverage is at concerning thresholds, the futures market is now perceived to be overheated. This scenario renders Ethereum susceptible to a potential short-squeeze event. If ETH’s price unexpectedly rallies, traders with short positions may have to cover their holdings by repurchasing ETH, leading to a rapid price increase,” the analyst noted.
The significant level to monitor remains the 100-day moving average, located around $2,700. This zone presents a noteworthy resistance area that bulls must overcome for further advancement.
Ethereum Faces Short-Squeeze Risk: Rising Leverage and Key Resistance at $2.7K
“With leverage at concerning levels, the futures market is now considered overheated. This leaves Ethereum vulnerable to a potential short-squeeze event.” – By @ShayanBTC7
👇https://t.co/LBeV3Lis4d pic.twitter.com/wUZ2sEowmW
— CryptoQuant.com (@cryptoquant_com) October 22, 2024
According to data from Coinglass, total crypto liquidations in the last 24 hours exceeded $165 million.
Of this total, about 75% comprised long positions, amounting to $129 million liquidated in the last 24 hours, with shorts making up approximately $36 million. In regards to Ethereum, data indicated that long positions accounted for $36 million of the total $39 million liquidated in the past 24 hours.
ETH’s price hit its highest point of the year at $4,070 in March.
