Ethereum [ETH] is once again facing bearish headwinds as it trades below the crucial $2,550 level. Over the weekend, ETH fell under this mark and briefly retested it as resistance before being rejected. At press time, the altcoin hovered just above $2,500, having dropped to $2,475 earlier on Monday. According to recent data, this move was driven by heavy capital outflows and a surge in taker sell volume, signaling clear seller dominance in the market.
Despite the bearish sentiment, AMBCrypto had previously highlighted $2,480 as a potential support level due to a cluster of liquidation levels in that range. This prediction materialized, and ETH’s bounce from $2,475 suggests buyers may be defending this level.
Liquidity Zones Could Drive Short-Term Price Movements
Technical analyst RektProof shared insights on X, suggesting Ethereum’s price could seek liquidity near $2,462 before attempting a rally towards $2,560. The recent price movement reflects this idea, with ETH briefly bouncing after tapping key liquidity zones. However, the rally failed to breach the short-term local high at $2,550 convincingly, and the asset remains confined within its weekend range.
The pattern of deviation above $2,745 followed by a rapid decline further confirms that Ethereum is currently being driven by the hunt for liquidity and stop-loss clusters. The lack of sustained bullish momentum hints that any upside moves may be short-lived unless accompanied by a shift in market sentiment.
Also Read: Ethereum Price Set to Rebound to $3,000 as On-Chain Data and Institutional Demand Surge
Liquidation Heatmap Signals Further Volatility Ahead
According to Coinglass, Ethereum’s liquidation heatmap reveals dense liquidity zones at both $2,450 and $2,570. The $2,570 level has yet to be swept, implying the potential for a minor bounce in the near term. However, if bearish pressure persists, the magnetic zone below $2,500 could be the next destination.
Analysts believe a drop to $2,450 may present a strategic buying opportunity, with the potential for ETH to retest local highs near $2,800. For now, Ethereum seems likely to remain trapped within its weekend range, with traders closely watching liquidity levels to determine the next decisive move.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
