Ethereum (ETH) has undergone extreme price fluctuations during this week. The second biggest cryptocurrency ETH struck bottom at $2,160 before beginning to bounce back and reached $2,760 during writing time.
Ethereum will briefly bounce back due to changing derivatives market rules but future downturns are still expected. Large position liquidations struck the ETH market during the week which decreased trading positions and thus lowered trader leverage.
Ethereum Leverage Ratio Drops 15% in Two Days
During the last two days Ethereum experienced a 15% decrease in leverage ratio which sank from 0.64 to 0.54 and remains the lowest point in six weeks. Recent data from Coinglass shows the reduction happened after major open interest fell back to $22 billion around late Nov 2024.
The market often lowers Ethereum prices when trading leverage decreases because historical data shows this pattern. ETH may keep descending unless derivatives traders return to opening positions and recover their confidence during the following days.
Ethereum receives negative market trends from traders since they took 375,000 ETH from derivative platforms over the previous three days. Many investors decide to remove their funds from high-risk positions in trading.
ETH Eyes $2,973 Resistance for Possible Rebound
Many users closed their leveraged trades by offloading ETH through spot exchanges during this concurrent trading activity. Finding a new position to sell Ether decreases the possibility of liquidation but might push the Ethereum price downwards.
The technology indicators show ETH bearishness because its 50-day Simple Moving Average now rests beneath the 100-day version. The observed trends indicate more selling pressure to come. The bear market may still end because buying pressure shown by CMF keeps spreading positive momentum.
ETH will likely bounce back when it takes back $2,973 as resistance from its 200-day SMA. When crypto traders succeed in breaking through resistance barriers they usually start an upward price trend. The Ethereum market’s positive outlook would increase when investors push the price above $3,304 to breach the 50-day SMA line.
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