Ethereum's Liquidation Barrier Exhibits Three Significant Indications Favorable for Bulls
Ethereum [ETH] Remains Constrained Amidst Mounting Sell Pressure on Binance
Signs of growing sell-side pressure are emerging for Ethereum on Binance, with the cryptocurrency trading within a narrow range between $2,400 and $2,700. Recently, fluxes in Ethereum's Binance Exchange Reserves have shown a notable increase, hinting at a rising amount of tokens being moved to exchanges — a traditionally indicative behavior of escalating sell pressure.
Strong liquidation resistance between $2,700 and $2,830 appears to be capping upward momentum for ETH, according to data from CoinGlass. As a result, ETH traded at $2,623.84 after a 3.60% daily drop, as reported by CryptoQuant.
Negative netflows persist despite sideways price action, with -248.83K ETH recorded in the last seven days and -60.9K ETH over 30 days. This trend suggests that these withdrawals might follow prior sell activity, revealing underlying hesitation in the market.
Lower open interest (OI), a measure of the total number of outstanding derivative contracts between market participants, has dropped by 8.99% to $18.14 billion. This development typically signals a lack of conviction and compressed volatility before a breakout or breakdown in the market, according to sources.
The congested liquidation zones responsible for anchoring ETH within its current trading range can be attributed to the following factors:
- A dense concentration of sell orders and liquidation walls in the $2,700 to $2,830 region has been observed. This resistance zone has proven challenging for bullish momentum and triggered selling pressure on multiple occasions.
- Ethereum's price has been threatening to break above this resistance zone but failing to do so, as sideways trading has prevailed in recent days.
Absent substantial volume and renewed buyer confidence, Ethereum may find it challenging to sustain levels above the $2,600 mark. If bullish attempts to breach the resistance at $2,700 are unsuccessful, the $2,480 support could face increased pressure in the future.
For the time being, caution remains advisable as Ethereum navigates a tight range with little forward momentum in sight. According to industry experts, large whale inflows, broader risk-off market sentiment, and cautious investor behavior appear to be driving this liquidation resistance on Binance.
- The increase in Ethereum [ETH] Binance Exchange Reserves, on-chain data suggesting a rise in tokens being moved to exchanges, may indicate a growing sell pressure.
- Despite the negative netflows and sideways price action, Ethereum remains within a narrow range on Binance, with sell-side pressure apparent.
- The lower open interest (OI) on crypto exchanges might signal a lack of conviction and compressed volatility, potentially leading to a breakout or breakdown in the Ethereum [ETH] market.
- Industry experts suggest that large whale inflows, broader risk-off market sentiment, and cautious investor behavior are driving the liquidation resistance on Binance for Ethereum [ETH], causing a tight range with little forward momentum.
