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Ethereum faces a $2.5B long-term liquidity risk if ETH dips below $2,100

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It’s Flashing Again in July
It’s Flashing Again in July

EtherETHThe price of, traded down on Thursday as a result of a knee-jerk reaction following yesterday’s US rate decision.

The key take-aways

  • ETH was down 7% at $2,100 Thursday and liquidated $144 Million in long positions.

  • If the price falls below $2000, it could cause an additional $2.5 billion of long-term liquidations on exchanges.

  • Watch the moving average 50 days around $2,100.

Ether faces a $2.5 billion liquidation

TradingView data showed that ETH prices dropped by 7% per day, and ETH/USD fell as low as 2,140 USD on Thursday.

ETH/USD 1-hour chart. Source: Cointelegraph/TradingView

Ether’s correction was accompanied with significant liquidations of long positions across the cryptocurrency market. This totaled $492.8 in the last 24 hour. With Ether moving to $2100, more than $144,000,000 in ETH long positions have been liquidated.

Total cryptocurrency liquidations Total crypto liquidations. Source: CoinGlass

Correction occurred in spite of another 60,999-ETH purchase by Tom Lee’s Bitmine Immersion Technologies, which currently holds approximately 4.6 million ETH or 3.81% the total supply.

Related: Ether accumulation data points to a rally toward $2.8K, but there’s a catch

Ether fell amid new sales in US-based spot ETH exchange-traded funds Data from Farside Investors shows that (ETFs), who recorded over $55.5 million of net outflows last Wednesday, snapped a six day streak inflows.

Table of Spot Ether ETF flow. Source: Farside Investors

Ether’s downward trend may accelerate if institutional and spot buyers do not step in quickly.

CoinGlass’ data suggests that the downside of Ether may be determined by its $2,000 key support. A correction below this level would result in over $2.5 billion dollars worth of liquidation for leveraged long positions across all exchanges.

Cryptocurrencies, Ethereum, Markets, Price Analysis, Tech Analysis, Market Analysis, Ether Price, Ethereum ETF, ETF
ETH exchange liquidation map. Source: CoinGlass

If the bearish trend takes over, ETH is vulnerable to a more severe cascade of losses.

Price of ETH is sensitive to FOMC Risks

The US Federal Open Market Committee’s (FOMC) decision to allow ether trading today has led to a bearish sentiment in the ether market. leave interest rates unchanged After the 18th March meeting

Chart below reveals that the ETH/USD has fallen after 7 of the 8 last FOMC meetings. This is one of its most macro-driven fractals.

ETH follows a pattern of stabilizing or rallying before meetings, and then correcting sharply after the announcement. 

ETH/USD chart for the day. Source: Cointelegraph/TradingView

ETH’s price dropped by 33%-43% in the deleveraging phase, which was deeper than normal. 

Technically, Ether is still bullish in spite of macro-risks. The price of Ether is currently retesting an important support zone around $2,100. It aligns to the upper trendline in an ascending Triangle and the 50-day moving average. simple moving average (SMA).

Chart of the daily ETH/USD exchange rate Source: Cointelegraph/TradingView

Bulls must hold ETH at this level or above to regain ground. The path will open up to the next significant resistance level at $2.575, which is the 100-day SMA. 

The price may rise even higher, to the target price of $2.700 (24% more than the current price), which is the measure-target price for the triangle.

In the opposite direction, failing to hold the $2,100 mark would weaken this setup and push ETH/USD toward the triangle support line at $2,000 while also putting the wider recovery on the table.

The following are some of the ways to get in touch with us. Cointelegraph reportedA close below the moving average of 20 days near $2,000 could indicate that the bears have taken control and risk a further correction towards the next major support area around $1,800.