Ethereum Gains Momentum as Bitcoin Aims for $60K Recovery: What’s Next for ETH Price Movement
The current state of the cryptocurrency market is reflecting a significant downturn, reminiscent of the aftermath of the November 2022 collapse of the FTX crypto exchange. This downturn is characterized by a substantial long liquidation across global markets, with both Bitcoin and Ethereum experiencing notable price declines. Bitcoin slipped below the $50,000 threshold, while Ethereum plummeted to its lowest point in eight months, hovering near $2,000. Despite these challenges, there are indications that a potential rebound is in the cards for Bitcoin, with a target set at $60,000. This positive outlook for Bitcoin could also pave the way for a bullish recovery for Ethereum, as market sentiment shifts towards buyer dominance.
The recent market dynamics have seen a surge in liquidation activities, particularly in the Ethereum ecosystem. Sellers have initiated a liquidation process following a brief period of long liquidation amounting to $350 million. Data from Coinglass reveals that Ethereum witnessed a total liquidation of nearly $21 million within a four-hour timeframe, with sellers offloading around $14 million worth of positions. The impact of Ethereum’s sharp 20% decline has reverberated across decentralized finance (DeFi) protocols, resulting in over $350 million in liquidations over the past 24 hours. Concerns have been raised within the crypto community regarding the potential implications of Ethereum’s price dropping to around $1,700, including the depegging of liquid staking tokens and stress on various DeFi protocols.
In the realm of Ethereum exchange-traded funds (ETFs), there has been a net withdrawal of $146 million, with the Grayscale Ethereum Trust (ETHE) experiencing more outflows compared to other Ethereum ETFs, as per CoinShares’ data. As the market stabilizes around key support levels, buyer interest in Ethereum seems to be consolidating around the $2.1K mark. Coinglass data indicates a negative funding rate for ETH, signaling that sellers are still in control of the market sentiment.
Recent insights from IntoTheBlock highlight a doubling in the number of addresses facing losses, surging from 18 million to 36 million within a week. This uptick underscores mounting concerns about potential significant liquidations, as holders may reach their tipping point and trigger further downward pressure on prices.
Looking ahead, Ethereum’s price trajectory remains a focal point of discussion. Despite dropping to a low of $2.1K, buyers have stepped in to defend against further declines, leading to a solid rebound. Ethereum has surpassed its 23.6% Fibonacci retracement level and now aims to breach the $2,500 mark. At present, ETH is trading at $2,411, marking a decline of over 12% in the last 24 hours.
On August 5, intensified selling pressure briefly pushed the price towards the psychological support level of $2,000. However, bullish momentum emerged as buyers intervened, resulting in a climb above $2,500, albeit facing minor selling pressure. The Relative Strength Index (RSI) has rebounded from oversold conditions and currently hovers around the 28-level, hinting at a potential relief rally on the horizon. This development could potentially propel the ETH/USDT pair back towards the $2,800 breakdown level. Failure to breach $2,800 may signal a lack of robust buying activity from bulls, increasing the risk of a drop below $2,000. Conversely, a breakout above $2.8K would bolster momentum and pave the way for a push towards $3,200.
