Ethereum risks long squeeze if $2,400 support breaks
Ethereum's price consolidation below $2,800 raises concerns of bearish momentum
Ethereum's price action is at a crucial point, consolidating within a descending triangle pattern that traders are closely watching for signs of a significant move. As the market consolidates below $2800, new data from the futures market suggests that the $2400 level could be critical for Ethereum's next move.
Futures Market and Macro Data Overview
Liquidity data shows considerable positioning just under $2400. In simple terms, liquidity pools below this level imply that if Ethereum breaks downwards, long holders may start closing positions quickly. This could increase selling pressure, pushing Ethereum toward the key 2150 support area, which aligns with the 0.0 Fibonacci retracement level.
Put another way, a dip below $2400 wouldn’t just represent a technical failure; it could set off a series of liquidations, intensifying the bearish momentum. This is why holding the $2400 level is so important for bullish traders.
If buyers manage to defend the $2400 area and prevent a drop, we might see prices stabilize or even attempt a rebound toward $2800, where the 0.5 Fibonacci retracement remains a strong resistance point. However, a failure to stay above $2400 could lead to more aggressive selling, driving prices down to 2150.
For sellers, the area below $2400 offers a tempting target to push prices lower, while for buyers, it represents a critical line of defense.
Adding to the uncertainty is the upcoming U.S. election, which could bring new volatility to financial markets, including crypto. Whether Ethereum moves higher or lower may be influenced as much by macroeconomic factors as by these vital support and resistance zones.
Ethereum's price tumbled 8% erasing most of this week's gains. Technical signals aren't looking promising in the short term.
