Ethereum Tests Crucial Support Line Amid Massive Selloff! Will ETH Price Lose $2,000 Milestone?

This week started with a downward trend in the market, largely influenced by a series of regulatory challenges. Notably, the SEC declined Coinbase’s proposal for the establishment of new crypto regulations. This regulatory uncertainty has had a significant impact, particularly on Bitcoin, which saw a massive drop, reaching a low near $40,500. Additionally, Ethereum (ETH) experienced a decrease in buying momentum, leading to a retest of its support line within the ongoing ascending pattern.

Whales Heavily Liquidated ETH

In the past day, the market has seen a significant uptick in liquidations, driven by investors offloading their assets in a state of panic. Data from Coinglass reveals that the market’s total liquidations exceeded $243 million, with long positions accounting for about $212 million of this figure. Ethereum, in particular, faced massive liquidations, nearing $33 million, with approximately $30 million coming from the liquidation of long positions.

As ETH price failed to pump above $2300, large holders quickly sent their holdings to exchanges for selling purposes. Notably, Lookonchain disclosed that Galaxy Digital deposited approximately 11,200 ETH ($24.3 million) to the cryptocurrency exchange Binance earlier today. Several analysts see this as the primary reason behind Ethereum’s recent decline.

CryptoQuant’s latest data indicates a shift in ETH’s Netflow, surging from an extreme negative state as the inflow has surged more than outflow in the past 24 hours. Although the metric remains in the negative zone, currently at -9069, it implies that smart investors are actively accumulating, thereby strengthening the support level. This activity hints at the potential for a market rebound.

Interestingly, the market has begun showing bullish signs in recent hours, with Ethereum’s price targeting a recovery from its support line. According to data from Coinglass, there has been a significant increase in the long/short ratio, now at 1.2099. This indicates that approximately 55% of all positions are currently expecting a rise in price. 

What’s Next For ETH Price?

Ether experienced a rejection near $2,325, resulting in the price to test ascending support at $2,100. However, bulls are defending strongly, aiming for a recovery above EMA20. As of writing, ETH price trades at $2,154, declining over 2.6% from yesterday’s rate.

The RSI’s negative divergence with the midline points to a slowdown in bullish momentum. Sellers are likely to attempt to strengthen their advantage by pushing Ether’s price below $2,100. Should they succeed, the ETH price might decline toward $2,010, and possibly further to a strong support level at $1,870.

On the other hand, if Ether manages to rebound and surges above the $2,200 level once again, it would imply that low levels are attracting bulls. Such a development would increase the probability of Ether rallying to the $2,464 mark. However, as the market now prepares for a correction, ETH price might decline further and test buyers’ patience.