Ethereum’s price is down by 7% to $2 100 leading to $144 million being liquidated from long positions. The main reason for the cryptocurrencys loss of price is the US Federal Open Market Committee’s (FOMC) decision to leave interest rates steady despite a higher inflation outlook.
This has endangered the important $2,000 support level, and if it is broken, it could set off over $2. 5 billion worth of additional long liquidations. Liquidation Risks and Market Sentiment TradingView charts indicate that ETH has lost 7% in the price within one day.
The cryptocurrency even dropped to a low of $2,140 during the correction. Along with the price fall, there were heavy long liquidations amounting to $492. 8 million in the crypto market over the last day. As Ether reached $2 100 more than $144 million in long ETH positions were liquidated.
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Ethereum has often reacted to FOMC announcements in its price moves. As most recently as the past two years, it has fallen after seven out of the last eight FOMC meetings, pointing to a macro-driven pattern.
Technically speaking, ETH is still a slight bull looking at the situation beyond the macro risks. CoinGlass reports that the current state of liquidations points to an increased risk of a more massive downward plunge if the bears pick up the pace.
It is now level-testing a strong base close to $2,100 that is at the same time the meeting point of the upper line of the ascending triangle pattern and the 50-SMA. Buyers should not let ETH fall below this level if they want to be able to get the hang of things again and make a run towards the next big opposing level at $2,575.
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Since the crypto market is going through these uncertain times, both investors and traders should keep themselves updated and be willing to change their actions according to the market conditions. Data on Ether’s buying behaviour suggests a potential rally, but the prevailing negative mood and FOMC risks could spoil this picture.
The downside for the crypto could depend on the $2,000 level, and if it suddenly breaks, a more significant correction to around $1,800 could be underway.
It’s not impossible for the price to bounce back but on the other hand, the danger of a long squeeze is very real and therefore, those who have financial stakes in the market should be very careful.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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