In recent days, the price of ETH surged to $1,750, fueled by Grayscale’s victory over the SEC. However, since then there has been a continuous decline. Early investors who bought ETH just before the price spike have started to liquidate their positions. This puts significant downward pressure on ETH at the higher levels, setting the price for potential losses in the coming days.
Long liquidation spikes after the rejection of ETH
It appears that major investors, often referred to as “whales,” are now taking action as the price of ETH encountered resistance at a key level. This has prompted those who acquired their assets early to liquidate their positions amid the recent price surge, securing their gains from the uptrend.
Coinglass data indicates that there is an increase in the number of long positions being liquidated after the price of ETH fell below $1,700. In total, nearly $14 million in liquidations took place as traders rushed to lock in their profits. This has faded the upside momentum for Ethereum by weakening buying pressure. As a result, ETH is now susceptible to further downward moves, with insufficient support to keep the price at its current level.
In addition, Ethereum’s overt interest based on strike price reveals a challenging landscape: the bears are encountering resistance to push the price down to $1,600, while the bulls struggle at $1,700. Despite a put-to-call ratio of 0.85, the market is trending bearish, as evidenced by the spike in open interest for $1,600 puts, which reached 17,203 contracts with a notional value of $28.3 million for Sept. 1.
Conversely, bullish bets have also increased, with open interest reaching 11,386 contracts and a notional value of $18.7 million, mainly targeting the $1,700 level, which is considered the maximum pain point.
Nevertheless, the market is showing signs of bearish momentum as ETH undergoes a corrective phase, pointing to the possibility of further declines for the altcoin.
What’s next for the ETH price?
The price of Ethereum witnessed a spike in bearish dominance after it failed to maintain momentum near USD 1,723. As a result, the price broke below multiple Fib channels and reached the crucial support near $1,645.
Ether successfully recovered from the key support level, showing that bullish traders are taking advantage of price declines. Currently, bulls are aiming to drive the price up and above the EMA20 trendline. This behavior indicates that the ETH price could continue to fluctuate between USD 1,640 and USD 1,700 for some time to come.
If the price fails to rise above the EMA20, it will be difficult to maintain recovery momentum, suggesting that the bears are still in play. If the price continues below the 20-day EMA, we could see it fall back towards the USD 1,644 support level. A break below will drop the price to $1,600.
On the other hand, if the price moves up and back above the USD 1,740 level, it might test the overhead resistance at USD 1,845.