Key takeaways:
ETH price dropped to its yearly open at $3,330 on Tuesday, wiping out more than $484.5 million on long ETH leveraged positions.
Risk-off behavior among derivatives traders weighs down Ether’s price.
The ETH price chart is forming a bearish pennant, targeting $2,400.
Ether (ETH) tumbled toward the $3,000 level on Tuesday, marking the first time it had revisited the psychological mark since mid-July.
The top altcoin fell as much as 16% to 3,050 on Tuesday, before recovering to the current price of $3,300, per Cointelegraph Markets Pro and TradingView.
This level coincides with the Jan. 1 open at $3,330, implying that ETH has erased its year-to-date gains, as shown in the chart below.
The latest sell-off has extended Ether’s drawdown from its Aug. 24 all-time high of $4,955 to 33%.
Ether wipes out $485 million in long ETH positions
Ether’s bearish performance today was accompanied by significant liquidations across the crypto market. According to data from CoinGlass, more than $1.7 billion leveraged crypto positions have been liquidated over the last 24 hours, with $1.3 billion representing long liquidations.
Related: BitMine adds over 200K ETH in ‘aggressive’ post-crash weekend buying
Long Ether liquidations amounted to $484.8 million, with the tally continuing at the time of publication.
The largest single liquidation order occurred on the Hyperliquid decentralized exchange involving an ETH/USD pair worth $26 million.
The scale of these liquidations mirrors the Aug. 1 liquidation event, when a total of $500 million in long ETH positions were wiped out. This triggered a 14% drop in ETH price between Aug. 1 and Aug. 2.
The scale of these liquidations mirrors the Sept. 22 liquidation event, when a total of $955 million in long ETH positions were wiped out. This triggered a 14% drop in price to $3,825 from $4,458 between Sept. 22 and Sept. 25.
Related: Bitcoin and Ether ETFs bleed as Solana quietly pulls in ‘curious capital’
Ether’s bearish pennant targets $2,380
From a technical perspective, the ETH/USD pair has formed a bearish pennant pattern in lower time frames. This is a downward continuation setup that forms after the price consolidates inside an up-sloping triangle following a sharp price drop.
Ether is now retesting the lower boundary of the pennant, currently at $3,300, which is acting as immediate support.
The pattern will resolve once the price breaks below this level, opening the path for the continuation of the downtrend toward the technical target of the bearish pennant at $2,380, representing a 29% decline from the current price.
However, the relative strength index, or RSI, has increased to 33 from extreme oversold conditions at 18 twelve hours ago, suggesting the ongoing recovery may persist for longer as dip buying continues.
A daily candlestick close above the resistance level at $3,400 can help Ether’s price reach the 50 SMA at $3,700 and later to $4,000, which would be a good sign for the bulls in regaining control.
For analyst Don Laguzzi, Ether’s upside remains intact as long as the price remains above the $2,800-$3,000 zone in the coming days.
“The weekly chart is flashing a massive **W** pattern — classic bull market continuation setup. The price is now coiling at the neckline retest ($ 3,000),” the analyst wrote in a post on Wednesday, adding:
“Wall Street needs to defend this zone.”
Conversely, the bears will attempt to drive the price below $2,750, which would invalidate the double-bottom bullish setup and potentially lead to a decline to $2,200.
As Cointelegraph reported, the bears are currently in control, and a decisive close below the psychological support level of $3,000 would clear the path for a deeper correction that can extend to $2,200 or lower.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
