Ethereum Price Dips Below $2,800 as Liquidations Near $1B: Analysis

TLDR

• Ethereum dropped below the $2,800 support level for the second time this week amid a broader market correction.
• The cryptocurrency fell 6.9% in a single day as global markets experienced a sharp decline.
• Ethereum’s price has remained in a tight range between $2,800 and $3,300 since the start of the year.
• Over $160 million in Ethereum positions were liquidated in the past 24 hours as market volatility increased.
• Analysts suggest that Ethereum remains in a macro stalemate and may need a breakout or breakdown to signal further movement.

Ethereum has dropped below the critical $2,800 support level for the second time this week, as the broader cryptocurrency market struggles. In the wake of this decline, many market observers are questioning whether investors should be concerned about the King of Altcoin‘s performance. The drop comes amid a global market correction that wiped out trillions in value across multiple sectors, including cryptocurrencies.

Ethereum Price Faces Strong Resistance Below $2,800

Ethereum’s price has hovered between $2,800 and $3,300 since the start of the year, with recent fluctuations emphasizing this range. The cryptocurrency fell below $2,800 on Thursday morning, briefly touching a one-month low of $2,773. As global markets faced a significant downturn, Ethereum retraced 6.9% on the day, following the broader market’s trend.

The drop comes amid mounting geopolitical tensions and macroeconomic uncertainty, which have led to a decrease in risk appetite. These factors have weighed heavily on the cryptocurrency market, halting Ethereum’s upward momentum seen earlier in January. Ethereum’s current price action suggests it will continue to trade within this range unless it breaks through either the upper or lower boundaries decisively.

Ethereum Liquidations Contribute to Market Instability

Ethereum’s recent price movement is accompanied by rising market liquidations. According to data from CoinGlass, over $160 million in Ethereum positions were liquidated in the past 24 hours alone. This surge in liquidations comes as traders who had taken leveraged positions were forcibly closed, contributing to further downward pressure on the price.

The total value of liquidations across the crypto market surpassed $917 million in the same period. More than half of these liquidations occurred in just four hours, with Bitcoin positions accounting for the largest share at $422 million. As Ethereum faces increased volatility, it remains susceptible to further short-term price fluctuations, particularly in the face of macroeconomic pressures.

Some analysts are not yet alarmed by Ethereum’s current price action, pointing to its range-bound trading. Sjuul from AltCryptoGems noted that Ethereum has been moving within a consistent price range between $2,600 and $3,350 for the past two months. He suggested that investors should wait for a clear breakout above the $3,350 level or a breakdown below $2,600 before making any decisions.

Trader EliZ shared a similar view, describing Ethereum’s price as trapped in a macro stalemate. He pointed out that Ethereum has been moving in a defined range without clear directional movement for months. Until a breakout or breakdown occurs, Ethereum’s price action should not be seen as signaling a change in market structure.

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