- Ethereum price was trading near $2,600 as the cryptocurrency experienced a brief lull.
- CryptoQuant analysts point out that ETH could witness a short squeeze, but points to $2.7,000 as key resistance.
Ethereum was trading near $2,750 on Monday, October 21, rising amid a broader rally in cryptocurrency markets as Bitcoin topped $69,000. However, as BTC fell, ETH price followed suit, testing support near $2,600 on October 22nd.
The price of Ethereum has bounced back above $2,620, with CryptoQuant analysts saying the top altcoin could be looking at a short squeeze scenario. According to Shayan B, this outlook is driven by increased leverage. ETH price could rise further if bulls break the supply wall around $2.7,000.
Ethereum price forecast
The market currently appears to be bearish on the Ethereum price outlook, meaning many traders expect the downtrend to continue. However, due to “relevant levels of leverage,” a short squeeze would mean unexpected price spikes and large liquidations.
In such case, ETH will profit.
“With the levels of leverage involved, futures markets are now considered overheated. This leaves Ethereum vulnerable to a potential short squeeze event. In such a scenario, if the price of ETH rises unexpectedly, traders holding short positions may be forced to cover their positions by buying back ETH, which could result in an impulsive price surge,” the analyst said. famous.
However, the key level remains at the 100-day moving average near $2,700. This area represents a notable resistance zone that the bulls will need to conquer to see further upside.
Ethereum faces risk of short squeeze: leverage at $2.7K and key resistance rising
“With the levels of leverage involved, futures markets are now considered overheated. This leaves Ethereum vulnerable to potential short-term stress events.” – by @ShayanBTC7
👇https://t.co/LBeV3Lis4d pic.twitter.com/wUZ2sEowmW
— CryptoQuant.com (@cryptoQuant_com) October 22, 2024
Source of data coin glass Total 24-hour cryptocurrency liquidation amounted to more than $165 million.
About 75% of these were long positions worth $129 million in the last 24 hours. The shorts accounted for about $36 million. Ethereum data shows that long positions accounted for $36 million of the total $39 million liquidated in the last 24 hours.
The price of ETH reached this year’s high of $4,070 in March.