TLDR
- Ethereum price has surged approximately 40% in the past week, reclaiming the $2,500 level
- Nearly 67 million ETH is approaching profitability for 6.61 million investors
- A 3% price movement could trigger up to $786M in short liquidations or $715M in long liquidations
- Technical patterns suggest a potential target of $4,570 based on a rounding bottom formation
- Increased spot ETF flows and decreased exchange reserves indicate accumulation and confidence in Ethereum
Ethereum has experienced a remarkable recovery over the past few weeks, climbing from $1,812 to $2,584 between May 8 and May 10. This surge created three consecutive bullish candles, marking a 42% increase in price. The rally has pushed ETH above the critical $2,500 threshold, bringing millions of investors closer to profitability.
The recent price action formed what analysts call a “triple white soldier” pattern, which is considered a strong bullish signal that reflects growing buying pressure in the market.
The recovery began from a two-year low of $1,386 during the tariff wars. Since then, Ethereum has completed a U-shaped pattern on charts, known as a rounding bottom. This formation typically signals a trend reversal and hints at further upward movement.
As Ethereum holds above $2,500, traders are watching for a breakout that could propel the price even higher. Technical analysis suggests a price target of $4,570, calculated by adding the depth of the U-shaped pattern to the breakout point.
Liquidation Risks and Market Dynamics
The current market structure puts short positions at high risk. According to data from Coinglass, there’s a cumulative short liquidation leverage of $786 million at $2,586. This means if Ethereum’s price rises by just 3%, it could trigger a short squeeze through forced exits of bearish positions.
On the flip side, there’s also risk for long positions. A $715 million long liquidation threshold exists at $2,438, about 3% below current prices. This creates a volatile situation where a small move in either direction could cause sharp price action.
The price movement coincides with the upcoming Pectra upgrade, which has attracted increased interest from staking participants. This upgrade has helped fuel confidence in Ethereum’s future alongside the broader market recovery.
Data shows that 6.61 million investors are on the verge of seeing their 66.96 million ETH turn profitable. Their purchase prices range between $2,360 and $2,557, with an average price of $2,462. If Ethereum crosses above $2,557, this supply will officially become profitable, potentially creating a strong support zone.
Ethereum ETFs have also seen increased flows, with spot demand growing over the past month. The falling exchange reserve indicates accumulation is taking place, showing signs of an early recovery phase.
Technical Outlook and Resistance Levels
Ethereum currently trades above its 200-day Exponential Moving Average (EMA), which marks a key pivot in the bullish trend. The Relative Strength Index (RSI) has moved into the overbought zone, indicating strong buyer dominance but also warning of possible short-term corrections.
Looking ahead, the 3-day chart shows a supply zone between $2,750 and $2,820. This aligns with liquidation levels and presents a target where traders might take profits. The 6-month ETH liquidation heatmap shows that $2,718 and $2,878 are the next sizeable liquidity pockets that could attract prices higher.
If Ethereum drops below the key support confluence of the 200-day EMA and 50% Fibonacci level near $2,430, the uptrend could be nullified. A breakdown might lead to a retest of the 100-day EMA at $2,144.
The percent supply in profit metric has surged higher during the past three weeks but isn’t yet at the 95% threshold that would indicate overheated conditions.
As Ethereum approaches the $3,000 psychological level, it may need a few weeks of consolidation below this mark to build momentum for its next move.
The current price action suggests that Ethereum’s recovery has room to grow, with the $2,800 level serving as the next major target before a potential push toward $3,000.
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