Ethereum struggles to hold above $4000, facing increased leverage and liquidity cluster challenges. Traders closely monitor signals for a potential bullish surge or the need for stop-loss orders. Market analysis reveals a divisive scenario in the crypto community.
Breaking through and maintaining Ethereum above $4,000 represents much more than just a psychological milestone for investors. This price zone currently captures all the attention in the cryptocurrency market. On-chain data reveals significant accumulation of leveraged positions around this critical threshold, creating a particularly volatile dynamic.
Trading volumes on major platforms have surged by nearly 40% in recent days, demonstrating a marked renewed interest in ETH. This increase in activity comes with a concerning rise in the long/short ratio, with a clear dominance of long positions. Historically, such a configuration often precedes sharp movements in either direction.
Order book analysis also shows massive concentrations of liquidity just below $4,000. These zones act as magnets for the price, attracting cascade liquidations during bearish movements. Market makers are watching these levels closely, knowing that a liquidity sweep could trigger a stop-loss cascade.
The open interest on Ethereum futures contracts has now reached a historical record of over $15 billion. This signals an overabundance of leverage that makes the market vulnerable to massive liquidations in case of a reversal. This configuration, typical of a potential bull trap, could be exploited by whales and institutions to take profits, thus trapping traders overexposed to the upside.
Despite these risks, the macroeconomic dynamics remain favorable to digital assets. Positive market sentiment and continuous technological advancements in the Ethereum network support solid buying pressure. The bullish scenario toward $4,500 remains feasible, even though a retracement to $3,600 remains possible in case of a technical correction.
On the technical side, Ethereum is evolving in a major confluence zone. The RSI near 68 reflects a tense market but not yet overbought, while the 50 and 200-day moving averages confirm the underlying bullish trend. The Bollinger Bands are tightening, announcing an imminent directional movement, while the volume profile highlights a key resistance between $4,050 and $4,150, a crucial zone to watch in the coming days.
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