Recent data from Ethereum’s Exchange Liquidation Map has revealed a significant buildup of short positions, indicating a looming threat of liquidations amounting to $2 billion upon ETH reaching the $3,000 price mark.
At the current moment, ETH is trading at $2,479.30. The escalating cumulative short liquidation leverage points towards a prevailing bearish sentiment within this particular price bracket.
If Ethereum’s price spikes to $3,000, the unwinding of these short positions could initiate a short squeeze, potentially driving the price even higher as short sellers rush to cover their positions.
This scenario might attract more positive sentiment and buying pressure, propelling ETH towards uncharted resistance levels.
On the flip side, failing to reach this critical threshold could sustain the bearish sentiment, leading to either price stabilization or further decline if the prevailing market bearishness persists.
Moreover, liquidations from long positions could exacerbate the situation in case of price dips, as hinted by the minor peaks in the long liquidation data.
Deciphering the significance of a potential monthly Hammer candle for Ethereum
An in-depth comparison between Bitcoin’s price trajectory in 2021 and Ethereum’s current movement suggests that ETH is on the verge of forming a monthly hammer candlestick pattern, akin to the one observed in Bitcoin’s pattern before its substantial surge in 2021.
If Ethereum successfully completes this pattern, it might signal a potential bullish momentum reminiscent of Bitcoin’s climb from approximately $10,000 to nearly $66,000.
Presently, with Ethereum’s price hovering around $2,479.76, there’s a possibility of following a similar trajectory, eyeing the $4,800 mark, which was a crucial resistance point in 2021, before potentially aiming for $16,000.
Conversely, if the pattern fails to materialize and the candle exhibits a negative trend, Ethereum could face support challenges around the $2,150 level, aligning with historical support thresholds.
This pattern signals an imminent decision point for Ethereum. The formation of a hammer candle could potentially set off a significant rally, reflecting historical trends witnessed in Bitcoin.
The upcoming trading sessions will be pivotal in determining whether Ethereum replicates Bitcoin’s historical performance or embarks on a bearish trajectory.