Key Points
- Ethereum [ETH] experienced a significant drop to January lows, with a 27.5% decrease within 12 hours.
- Despite a brief bounce back, the future market saw a large number of ETH traders wiped out.
Ethereum [ETH] experienced a dramatic drop to its January lows on 5th July.
The cryptocurrency’s value dropped below $2.9k, followed by a further 27.5% decrease over the next 12 hours.
Ethereum’s Brief Bounce Back
At the time of reporting, ETH had bounced back to $2366 from its lows of $2.1k, marking a 12.17% increase.
However, the smart money that bought in at $2.9k and $3.1k did not see the returns they anticipated, breaking their previously flawless track record.
The price crash over the past few days was severe, with Ethereum markets witnessing $346.5 million worth of liquidations in just 24 hours.
The daily RSI fell to 19, its lowest since 18th August 2023.
Market Crashes and Liquidations
The rally earlier this year has been entirely retraced, with the $2.5k-$2.6k zone likely to serve as resistance on the way up.
The On-Balance Volume (OBV) hit a new low, indicating extreme selling volume.
The day’s trading volume is 1.55 million ETH and counting, the highest in 2024.
While some may see this as a buying opportunity, more cautious traders and investors may want to wait until prices reclaim key support zones and remain above them for a few days before they feel confident enough to bid.
Market crashes like the one Ethereum experienced are not the best times for leveraged trades, as over 270k+ crypto traders discovered over the weekend.
Open Interest fell from $9.9 billion on the 3rd of August to $7.35 billion at press time.
The spot CVD also fell, supporting the idea of intense selling.
The liquidations of the past couple of days were mostly long, as expected.
A bounce toward $2.5k was possible, but the New York trading session could see added selling pressure.
