ETH Plunges 13.40%, Then Whipsaws: $330M in Liquidations—Price Analysis

• Ethereum’s falling wedge pattern suggests a bullish breakout if resistance breaks.
• ETH’s RSI nears oversold levels, but bearish MACD signals continued weakness.
• Liquidation spikes above $330M highlight the risks of leveraged ETH trading.

Ethereum (ETH) is giving investors a serious case of whiplash. After a 13.40% drop in the past week, and with the trading volume in the last 24 hours standing at $17.64 billion, the market is clearly on edge. 

Analysts are watching price patterns, technical indicators, and liquidation trends to figure out Ethereum’s next potential move. By the way, ETH trades at $1,893.17 as of press time.

Mixed Signals: Falling Wedge vs. Bearish Outlook

According to Daan Crypto Trades, Ethereum has been consolidating following a substantial market downturn. He points to a falling wedge pattern as a possible sign of a trend reversal. 

This technical structure is typically considered bullish, suggesting that if ETH can break above the resistance zone, a price recovery could be imminent. For this to happen, ETH must break and hold above a key resistance zone before even thinking about a move towards the $2,000+ region.

The ETH/BTC ratio remains near multi-year lows, despite showing slight resilience. This bounce alone isn’t strong enough to confirm a trend reversal. Sustained strength and a break of key resistance levels are necessary for a significant shift in momentum.

Related: Ethereum Retraces to $1612.81 Support After Short-Lived Spike

Conflicting Views: $800 on the Table?

Adding to the uncertainty, Ali Martinez offers a bearish perspective, highlighting that Ethereum is breaking out, but if momentum falters, ETH could see a move down toward $800. 

Leverage and Liquidations: A Recipe for Volatility

The Ethereum Total Liquidations Chart highlights the impact of leverage trading on price movements. Significant liquidation spikes occur around crucial price zones between $2,000 and $3,000. When ETH prices surge, long liquidations increase, whereas price declines trigger short liquidations. 

The highest liquidation levels surpass $330 million, revealing aggressive leveraged positions getting wiped out. A large long liquidation spike coincided with a sharp price drop, reinforcing the high-risk nature of leveraged trading. In other words, high leverage can lead to massive losses – fast.

Technical Indicators: RSI and MACD Analysis

From a technical standpoint, ETH’s Relative Strength Index (RSI) is around 33.29, nearing oversold territory. An RSI below 30 typically signals that an asset is undervalued, potentially setting the stage for a price rebound. 

Related: Ethereum Mining Alternative Ravencoin Surges Almost 70% In 1 Week

However, the MACD remains negative, with both the MACD line and signal line below zero. This confirms bearish momentum, but a crossover could indicate a trend reversal. So, the RSI hints at a possible bounce, but the MACD is still flashing warning signs.