Ethereum

August 24, 2025 at 21:10

ETH Short Liquidation Brings Nearby Support Test

I see ETH undergoing liquidation pressure on the short side, with a notable cover near $4,781.44 after a $71.6k liquidated position. This dynamic suggests traders may be unwinding bearish bets as price tests the $4.78k area, potentially signaling a short-term shift in momentum or a squeeze risk if buyers step in.

Given the size of the liquidated short, liquidity and order flow around this level could dictate next moves. If price holds above the liquidation-trigger price, we could see a bounce or consolidation; if it breaks down, renewed downside could unfold with fresh shorts entering the market.

Overall, the immediate cue is to watch for follow-through price action and changing open interest around $4,780–$4,800 to gauge whether this is a transient squeeze or a setup for a more meaningful move in ETH.

Analysis

The opinion centers on a notable short liquidations event in Ethereum, highlighting how liquidations can create counter-movements and affect liquidity around a critical price zone. The key implied mechanism is a squeeze risk if the market sees rapid unwinding of short positions as price nears support levels, potentially driving a temporary rally or a bounce in ETH.

Contextually, large liquidations can lead to rapid shifts in open interest and order flow. Traders will be watching whether the market sustains price above the liquidation level (approximately $4,780) or fails it, which would influence near-term momentum and risk tone. This event underscores the importance of immediately adjacent support and resistance, as well as the balance between bears and bulls in a high-liquidity zone.

Implications for risk management include monitoring IV, funding rates, and daily volume around the cited price to assess whether the rally is a genuine shift in sentiment or a temporary squeeze before retracement. The event is a reminder that ETH can exhibit high volatility around large liquidations, especially in a congested tepid-to-bullish macro mood.

Recommendation

In the near term, adopt a cautious stance around $4,780–$4,800. If ETH sustains above this zone with constructive volume, a shallow rally or test of higher resistance targets around $4,900–$5,000 could occur. Conversely, a break below $4,780 could invite further downside toward the $4,600–$4,700 region.

Specific actions: 1) use tight stop-losses just below $4,780 for longs; 2) consider a modest long bias on a bullish continuation signal (e.g., price closes above $4,820 with strong volume); 3) avoid loading up on new shorts without clear momentum or a retracement setup, given liquidation-driven volatility. 4) monitor open interest and funding rates for signs of aggressive positioning shifts.

Sep 19, 2025, 20:27

Ethereum Bearish Near-Term View for ETHUSD

Ethereum shows a bearish near-term bias; ETH short-term sell signal amid price pullback and volatility.

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