The ongoing tariff war between the United States and other countries has had a significant impact on the cryptocurrency market, with Ethereum (ETH) in particular facing the threat of a major crash. Over the past five trading days, ETH has experienced a 25% drop in value, reaching a critical make-or-break level.
Analyzing the price action and technical analysis of Ethereum, it is evident that the asset has broken its long-standing support from the ascending trendline that had been in place since July 2022. This breakdown has led to a steady decline in the price, with ETH losing key support levels at $2,200 and $1,830, and now hovering near a critical support level at $1,530.
Experts predict that if the downward momentum continues, Ethereum could experience a significant crash. The daily chart indicates that if the price fails to hold above $1,450 and closes below this level, there is a high likelihood of a further 30% drop to the next support level at $1,000 in the near future.
With ETH currently trading below the Exponential Moving Average (EMA) on multiple timeframes, including four-hour, daily, and weekly, there is a strong bearish trend in place. Despite losing nearly 10.50% of its value in the past 24 hours, ETH has seen a record surge in trading volume, indicating heightened activity from traders and investors.
Interestingly, despite the recent price crash, traders are placing bullish bets on Ethereum, according to on-chain analytics firm Coinglass. Data shows that traders have accumulated $201 million worth of long positions at the $1,526 support level, while $100 million worth of short positions have been built at $1,571.
The current market sentiment suggests that bulls are dominating at the moment, potentially leading to the liquidation of short positions worth $100 million. However, if the sentiment shifts, it could also result in the liquidation of long positions. Traders are closely monitoring these support levels and positions to determine the future direction of Ethereum’s price.
In conclusion, Ethereum is facing a critical juncture as it navigates through a period of heightened volatility and uncertainty in the cryptocurrency market. Traders and investors are advised to exercise caution and closely monitor price movements to make informed decisions in this challenging environment.