Will Ethereum Price Hold the Line at $2,400 or Sink Deeper?

Ethereum faces significant price fluctuations, with a recent drop to $2,444 amid $170 million in liquidations. Increased inflows into exchanges signal panic selling, while the RSI hints at a potential bounce. Traders should watch for critical support at $2,400 and resistance at $2,495 in the ongoing volatile climate.

The crypto market is currently encountering significant turbulence, leading to widespread sell-offs and noteworthy liquidations. Recent data from CoinGlass has revealed that over the past 24 hours, a staggering $458.61 million worth of positions were liquidated. Ethereum was particularly affected, with liquidations amounting to $170.78 million. Out of that, long positions took the hardest hit, totalling $157.03 million, while short positions saw $13.75 million liquidated. Uncertainty and volatility loom large, leaving traders in a precarious position with Ethereum’s short-term price still unclear.

Recent on-chain data from Santiment indicates a surge in Ethereum (ETH) inflows to centralized exchanges, which typically foreshadows selling intentions among holders. Inflows are currently outpacing outflows, suggesting that many are preparing to liquidate their assets following the recent correction. This pattern reflects panic selling or aggressive profit-taking trends, raising concerns about further downward pressure unless a strong buying interest can intervene. Until these inflows lessen, Ethereum’s price may continue to be under significant selling pressure, suggesting a bearish sentiment is gripping the market.

At present, Ethereum’s price is hovering around $2,444.01, marking a 4.15% decline over the past day. Interestingly, trading volume surged by 44.75% to reach $20.99 billion, indicating heightened trading activity amid liquidation-triggered volatility. In technical analysis terms, Ethereum’s Relative Strength Index (RSI) is at 40.29, which is just above the oversold threshold and suggests a potential for a short-term bounce back.

Moreover, looking at the 4-hour chart reveals that Ethereum has recently bounced off the lower Bollinger Band at $2,371, forming what appears to be a bullish hammer-like candle, signalling some buyer defence at these lower levels. However, Ethereum is still trading below the 20-period Simple Moving Average (SMA), which highlights a persistent bearish trend. In order to initiate a recovery, bulls must overcome the $2,495 resistance. If they fail, Ethereum could find itself testing the $2,400 support zone yet again.

Questions continue to arise about the current state of Ethereum’s price trajectory. Traders are keen to know why the price has dipped so sharply today. The answer primarily lies in the increased liquidations combined with a surge in inflows to exchanges. Many are asking if now is a good time to bargain-hunt for ETH. For the moment, traders should exercise caution as while short-term signs of buyer support are visible, technical indicators remain bearish, with high inflows implying potential further volatility. Key price levels to monitor are $2,400 as support, and $2,495 acting as resistance in the current market landscape.