Ethereum price traded near $2,600 as crypto experienced a brief lull.
A CryptoQuant analyst says ETH could witness a short squeeze, but points to $2.7k as key resistance.
Ethereum traded to near $2,750 on Monday, Oct. 21, rising amid broader gains for the crypto market as Bitcoin shot past $69,000. However, with BTC dipping, the ETH price followed suit and tested support near $2,600 on Oct. 22.
The price of Ethereum has returned above $2,620, and a CryptoQuant analyst says the top altcoin could see a short squeeze scenario. According to Shayan B, this outlook results from the rising leverage. If the bulls manage to break out above the supply wall around $2.7k, then ETH price could rise further.
Ethereum price outlook
Currently, the market seems bearish on ether price prospects, which means many traders expected a downside continuation. But with “leverage at concerning levels,” a short squeeze would mean unexpected price surge and major liquidations.
ETH would notch gains in such a case.
“With leverage at concerning levels, the futures market is now considered overheated. This leaves Ethereum vulnerable to a potential short-squeeze event. In such a scenario, if ETH’s price rises unexpectedly, traders with short positions could be forced to cover their positions by buying back ETH, creating an impulsive price spike,” the analyst noted.
The key level however remains at the 100-day moving average near $2,700. This area presents a notable resistance area that bulls may have to conquer to see further gains.
Ethereum Faces Short-Squeeze Risk: Rising Leverage and Key Resistance at $2.7K
“With leverage at concerning levels, the futures market is now considered overheated. This leaves Ethereum vulnerable to a potential short-squeeze event.” – By @ShayanBTC7
👇https://t.co/LBeV3Lis4d pic.twitter.com/wUZ2sEowmW
— CryptoQuant.com (@cryptoquant_com) October 22, 2024
Data from Coinglass showed total 24-hour crypto liquidations stood at over $165 million.
Most of this, about 75% were long positions rekt over the past 24 hours at $129 million. Shorts accounted for about $36 million. Looking at Ethereum, data showed longs accounted for $36 million of the total $39 million liquidated over the past 24 hours.
ETH price reached its year-to-date peak of $4,070 in March.
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