Ethereum rallies after CPI, but ETH sellers reclaim $2.5K – What changed?
Traders can trim short their bullish Ethereum expectations, since the breakout has failed to hold.
On Friday, the 11th of September, Ethereum experienced a rally from $2,437 that reached as high as $2,667. It liquidated $211 million in short positions for the day.
To add to the bulls’ pain, the price has since fallen back below the psychological $2,500 resistance level. Here’s what you should know to understand what is ahead for Ethereum.
The 2-hour, 10% Ethereum price surge, explained
Crypto analyst Ali Martinez noted that the short-term price move followed the CPI report, which showed inflation was at a 3.4% annual pace. The $2,530 high has been a place the bulls have tried to surpass since the 21st of August.
The coiled price action beneath this level built up long and short liquidations around the short-term range. The stock futures rising ahead of the report only lit the spark that hunted these overhead short liquidations down.
The UTXO Realized Price Distribution shows the distribution of Bitcoin supply based on the price at which the last UTXO moved. Tall clusters highlight heavy accumulation, making the $2,700-$2,800 area major resistance.
There was also an increase in whale activity over the past couple of days, despite a lack of a strong price trend.
What next for Ethereum?
In a recent report, AMBCrypto highlighted the range formation around Ethereum. This range appeared to have been convincingly broken, but a few hours after the breakout, the price retraced right back into the range.
The price action and the large short liquidations meant that the breakout was likely a move to hunt down liquidity.
Trader Morin broke down the potential “trap” ahead. Simply put, the idea is to trap as many people as possible before the real move, which in this case would likely be downward toward $2,100.
A breakdown below the $2,380 range low would be a clear signal of bearish dominance. Until then, traders can trim short their bullish expectations, since the breakout has failed to hold.
Final Summary
- The Ethereum bullish breakout on Friday led to $315 million in long and short liquidations in 24 hours, the majority of them being short.
- Since the breakout, ETH prices have strayed back within the range, undermining the bullish case for the leading altcoin.
