Ethereum finds itself at a critical juncture, retesting the $2,800 support level as a broader market downturn triggers nearly $1 billion in crypto liquidations. This week's market volatility has investors questioning the immediate future of the second-largest cryptocurrency.
Global Market Turbulence Triggers Ethereum's Slide
Global financial markets experienced a sharp decline this Thursday, with stocks, cryptocurrencies, and precious metals collectively shedding over $3 trillion in value within hours. Ethereum (ETH), the second-largest cryptocurrency by market capitalization, was not immune to this widespread correction, retracing a significant 6.9% in the daily timeframe. Having hovered between $2,800 and $3,300 since the beginning of the year, ETH's recent performance reflects its struggle to reclaim the upper bounds of this range. The broader market's early January momentum has been effectively halted by escalating geopolitical tensions and pervasive macroeconomic uncertainty, dampening the appetite for risk assets across the board.
Crypto Liquidations Spike Towards $1 Billion Mark
The widespread market decline triggered a cascade of liquidations across the crypto landscape. Data from CoinGlass reveals that total crypto liquidations surged to nearly $1 billion over the past 24 hours, with approximately $917.17 million in leveraged positions forcibly closed. This liquidation event impacted 223,915 traders, with the largest single order occurring on Hyperliquid, valued at $31.64 million. Notably, more than half of these liquidations, exceeding $620 million, took place within a mere four-hour window. Bitcoin (BTC) positions accounted for a substantial portion of the losses at around $422 million, while Ethereum positions contributed approximately $160 million to the total.
Analysts Weigh In: ETH Stuck in an "Endless Range"
Amidst the pronounced market correction, crypto analysts have offered their perspectives on Ethereum's price action. Sjuel from AltCryptoGems highlighted that Ethereum has been trading within a "seemingly endless range" between $2,600 and $3,350 for the past two months, suggesting a lack of a clear directional trend. He advises investors to await a definitive breakout above the upper boundary or a breakdown below the lower boundary of this range before making significant investment decisions. Echoing this sentiment, trader EliZ described ETH's macro perspective as exhibiting neither significant strength nor weakness, but rather an "enormous, forced equilibrium." He emphasized that Ethereum continues to move within "well-defined boxes" over longer timeframes without establishing any structural directionality. For EliZ, short-term efforts failing to achieve a successful move and confirmation from this key range merely signify "liquidity rotation" rather than a fundamental "change of regime." As of this writing, Ethereum is trading at $2,798, marking a 5.3% decline on the weekly timeframe, underscoring the market's current state of indecision.
