The cryptocurrency market is experiencing its poorest daily trend since the November 2022 collapse of the FTX crypto exchange, reflecting a massive long liquidation in global markets. As Bitcoin’s price fell below the $50,000 mark, the price of Ethereum plunged to an eight-month low near $2,000. However, with Bitcoin now targeting a rebound towards $60,000, Ethereum could also see a bullish recovery as buyers begin to dominate the market.
Sellers Started Their Liquidation Process
As ETH price strongly defended the $2.1K level, there’s a surge in selling positions being liquidated after a brief $350 million worth of long liquidation. Data from Coinglass states that ETH price witnessed a total liquidation of nearly $21 million in the last four hours and sellers liquidated around $14 million worth of positions.
Read more: Worst Crypto Crash Since 2022 Has Begun: Understanding What Is Happening
Ethereum’s severe 20% drop significantly impacted DeFi protocols, resulting in over $350 million in liquidations within the last 24 hours. Various crypto community members on X have expressed concerns that if Ethereum’s price falls to approximately $1,700, it could lead to depegging of several liquid staking tokens and stress on multiple DeFi protocols.
Ethereum ETFs recorded a net withdrawal of $146 million, with the Grayscale Ethereum Trust (ETHE) experiencing more outflows than the inflows seen in other Ethereum ETFs, according to CoinShares’ data.
As the market stabilizes around support levels, buyer interest in Ethereum appears to be consolidating near the $2.1K mark. Data from Coinglass indicates a negative funding rate for ETH, suggesting that sellers still maintain control.
IntoTheBlock data reveals that the number of addresses facing losses has doubled recently, jumping from 18 million to 36 million in just one week. This increase suggests growing concerns about potential significant liquidations, as holders may lose patience and trigger further declines.
What’s Next For ETH Price?
Ethereum price dropped toward the low of $2.1K. However, buyers strongly defended further declines as ETH price made a solid rebound. Ethereum quickly surged above its 23.6% Fib level and now aims for a move above $2,500. As of writing, ETH price trades at $2,411, declining over 12% in the last 24 hours.
On August 5, intensified selling drove the price toward the $2,000 psychological support. A slight positive emerged as bulls stepped in to buy the dip, seen by the long tail on the candlestick. ETH price climbed above $2,500; however, it is now facing minor selling pressure.
The RSI has recovered from the oversold conditions and currently trades at 28-level, suggesting that a relief rally may be on the horizon. This might potentially bring the ETH/USDT pair back to the $2,800 breakdown level.
However, if the price does not reach $2,800, it indicates a lack of strong buying from the bulls. This could increase the risk of the price dropping below $2,000. However, a surge above $2.8K will strengthen the momentum and might send the price toward $3,200.