Ethereum (ETH) Price: Falling Wedge Compression Sets Stage for Breakout Rally

TLDR

• Ethereum has experienced a liquidity reset that matches historical patterns seen at previous market bottom zones
• ETH trades at $3,019 inside a descending wedge pattern with resistance at $3,206 and $3,607
• Long liquidations reached nearly $150 million in 24 hours as leveraged positions were forced to unwind
• The Money Flow Index sits at mid-range, indicating steady inflow strength without exhaustion
• ETH dropped 5.5% during the selloff, following broader risk asset market weakness

Ethereum now trades at $3,019 following a liquidity reset that mirrors patterns seen at earlier market bottom zones. The second-largest cryptocurrency dropped 5.5% over a 24-hour period as liquidations surged across leveraged positions.

The current liquidity data shows a complete reset similar to previous cycles. Each past liquidity drop produced strong reactions once market depth started improving again. ETH now moves around zones that triggered major reversals earlier in the year.

Leverage Unwinding Drives Selling Pressure

Long liquidations for Ethereum reached nearly $150 million during the recent decline. This represents a sharp increase from typical 24-hour liquidation volumes. These liquidations occur when leveraged positions using perpetual futures get forced to close.

Perpetual futures allow traders to take leveraged bets on price movements. Some investors use these instruments for hedging large holdings. Others use them to speculate on short-term price changes.

The high liquidation numbers reflect the amount of leverage still present in the Ethereum market. When prices move against leveraged positions, automatic selling pressure increases as positions get closed out.

Market depth has thinned again, forcing price to move more aggressively during each swing. This creates conditions where direction forms quickly once liquidity begins rebuilding from lower levels.

The selloff affected most risk assets across markets. Unprofitable tech companies and AI stocks came under pressure as investors questioned high spending levels relative to uncertain future profits. Valuations near historic levels added to concerns about current price levels.

Technical Pattern Shows Compression

ETH trades inside a descending wedge that has guided price action for several weeks. The price touches the wedge floor near $2,930 and shows buy-side strength during each test.

Sellers defend the declining upper boundary. The space between both trendlines keeps shrinking with every swing. This compression increases pressure and reduces room for sideways movement.

Immediate resistance sits at $3,206. A stronger barrier stands at $3,607. ETH must clear both levels before buyers gain broader control.

The Money Flow Index sits near mid-range. This shows stable inflow strength rather than exhaustion or weakness. The position supports a potential breakout attempt if ETH lifts above the descending trendline.

Descending wedges often break once boundaries compress tightly. A close above the wedge ceiling opens the path toward $4,244. Success at that level gives ETH room to target $4,800 as the chart regains healthier structure.

Many participants responded quickly at similar reset zones in past cycles. The latest reset places ETH at a technical floor where decisive activity often emerges. These parallels give traders reason to watch for potential shifts.

Reset zones rarely remain quiet for long. Participants act quickly after markets display early rebuilding signs. The compression narrows movement and increases the probability of strong direction once depth returns.

The current price level interacts with zones where thinning depth forces sharper compression. Traders respond to this environment because earlier cycles showed clear shifts from identical structures.

ETH respects the wedge floor while approaching a point where compression forces a stronger move. A break above $3,206 opens the road toward $3,607 and potentially $4,800. The chart now trades at $3,019 as liquidations complete and new liquidity patterns begin forming.

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