Ethereum’s (ETH) performance remains lackluster as it trades around $2,200 today after gaining 1.04% on Tuesday. Today, ETH price is up nearly 2% in an attempt to recoup the losses due to the 15% crash noted on March 3. Due to the drastic plummets and rallies and the upcoming Crypto Summit on March 7, traders are more eager than ever and anticipate a rally. As a result, CoinGlass data shows more than $700 million worth of long positions will be wiped if Ethereum price drops nearly 8%. Let’s explore if ETH will drop lower and hunt the eager bulls or continue to ascend higher.
Key Ethereum Price Liquidation Levels to Watch Ahead of Crypto Summit on March 7
Crypto volatility has skyrocketed lately as the sector remains sensitive to macroeconomic events like Trump’s tariff announcement or the Fed’s take on inflation. Trump’s crypto policy promises and the upcoming Crypto Summit on March 7 have also added to this heightened volatility.
A closer look at CoinGlass’ Liquidation Map shows that $298 million worth of long positions will be liquidated below $2,154, just 2.60% lower than the current price of ETH.
$582 million and $705 million long positions will all be forced to close if Ethereum price drops below $2,107 and $2,049, respectively.
All in all, an 8% drop in Ethereum will catalyze long liquidations worth more than $700 million.
Will ETH Continue its Price Crash?
A 2% to 8% drop is easy to achieve in the cryptocurrency space with heightened volatility. Therefore, if the Ethereum price drops 8%, it would be a good place to accumulate ETH at a discount, as the majority of short positions will be hunting for liquidity. i.e., when short positions are covered, they buy the underlying contract, in this case, Ethereum.
If the liquidation event is followed by a strong spike in spot buying, it could catalyze a swift move to the upside.
From a long-term perspective, the daily chart shows Ethereum price has already swept $2,100 on March 4. This move caused a massive decline in Open Interest, likely suggesting the forced closing of long positions. Typically, such liquidation events serve as a good reversal signal. February 3, September 6, 2024 and August 5, 2024 are some examples.
If history repeats, investors can expect ETH price to catalyze a similar liquidation event around the Crypto Summit on March 7.
Key Levels to Watch
The ideal Ethereum price scenario for kickstarting a bullish reversal would be a sustained rally in the March 7 Crypto Summit followed by a crash that leads to a bottom formation.
In such a case, Ethereum price will need to retest the $2,600 and $2,700 resistance levels and form a top on March 7. A reversal or profit-taking after the highly anticipated event pushes ETH price to slide below the aforementioned key liquidation levels and into a strong demand zone, extending from $1,600 to $1,700. This move would also push the Relative Strength Index (RSI) into an oversold condition, further highlighting the buying opportunity.
Ethereum price prediction notes that the upside targets for buyers that accumulate ETH between $1,600 and $1,700 are the liquidity zones extending from $4,000 to $4,100.
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