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Main takeaways:
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The price of ETH fell to its annual opening at $3,330 on Tuesday, wiping out more than $484.5 million on leveraged ETH long positions.
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Risk behavior among derivatives traders weighs on the price of Ether.
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The ETH price chart forms a bearish pennant, targeting $2,400.
ether (ETH) fell toward the $3,000 level on Tuesday, marking the first time it had revisited the psychological mark since mid-July.
The top altcoin fell 16% to 3050 on Tuesday, before recovering to the current price of $3300, for Cointelegraph Markets Pro and TradingView.
This level coincides with the January 1 opening at $3330, which implies that ETH has erased its gains for the year, as shown in the chart below.
The latest sell-off extended Ether’s drawdown from its On August 24 the all-time high of $4,955 to 33%.
Ether clears $485 million in ETH long positions
The bearish performance of Ether today was accompanied by significant liquidations in the crypto market. According to data from CoinGlass, more than $1.7 billion of leveraged crypto positions were liquidated in the last 24 hours, with $1.3 billion representing long liquidations.
Related: BitMine adds over 200K ETH in ‘aggressive’ buying of post-crash weekend
Long Ether liquidations totaled $484.8 million, with the count continuing at the time of publication.
The largest liquidation order took place on the decentralized exchange Hyperliquid involving an ETH/USD pair worth $26 million.
The scale of these liquidations mirrors the August 1 liquidation event, when a total of $500 million in long ETH positions were liquidated. This caused a 14% drop in the price of ETH between August 1st and August 2nd.
The scale of these liquidations mirrors the liquidation event on September 22, when a total of $955 million in long ETH positions were liquidated. This triggered a 14% price drop to $3,825 from $4,458 between September 22nd and September 25th.
Related: Bitcoin and Ether ETFs bleed as Solana quietly pulls in ‘curious capital’
Ether’s bearish pennant is targeting $2,380
From a technical perspective, the ETH/USD pair has formed a bearish pennant pattern in lower time frames. This is a descending continuation configuration that forms after price consolidation in an up-sloping triangle following a sharp price drop.
Ether is now again testing the lower boundary of the pennant, currently at $3,300, which acts as immediate support.
The pattern will resolve once the price breaks below this level, paving the way for the continuation of the downward trend towards the technical objective of the bearish pennant at $2,380, representing a decrease of 29% from the current price.
However, the relative strength index, or RSIrose to 33 from extreme oversold conditions at 18 twelve hours ago, suggesting that the ongoing recovery may persist for more purchase of dip continues.
A daily candlestick close to the resistance level at $3,400 can help the price of Ether to reach the 50 SMA at $3,700 and later at $4,000, which would be a good sign for the bulls to regain control.
For analyst Don Laguzzi, the upside of Ether remains intact, as long as the price remains above the $2,800-$3,000 zone in the coming days.
“The weekly chart is flashing a massive **W** pattern – classic bull market continuation setup. The price has now broken through to the neckline retest ($3,000),” the analyst. he wrote in a post on Wednesday, adding:
“Wall Street needs to defend this area.”
Conversely, the bears will try to drive the price below $2,750, which would invalidate the bullish double bottom setup and potentially lead to a drop to $2,200.
Like Cointelegraph reportedthe bears are now in control, and a decisive stop below the psychological support level of $3,000 will clear the way for a deeper correction that may extend to $2,200 or lower.
This article does not contain investment advice or recommendations. Every investment and business move involves risk, and readers should do their own research when making a decision.
