Ethereum’s Price Stalls Below $3,500 as Leverage Ratios Climb—What Next?
Ethereum has been consolidating within a tight price range for several months, trading between $3,200 and $3,500. Despite recent gains in the broader market, ETH struggles to continue rising Break through this range.
This stagnation comes after a prolonged decline from the all-time high of $4,800 reached in late 2021. The cryptocurrency is currently down about 32% from this peak.
Notably, even the appointment of a new pro-crypto government and a new awareness of regulatory transparency failed to propel Ethereum above current resistance levels.
Under these market conditions, CryptoQuant QuickTake platform contributor ShayanBTC has Highlight A key indicator that could signal an impending price move for ETH.
Increased Ethereum Leverage and Its Impact
According to a recent analysis uploaded by Shayan on the CryptoQuant QuickTake platform, Ethereum’s estimated leverage, a measure of the average leverage used by futures market participants, has been climbing steadily so far.
The rise, reported by Shayan, reflects traders’ increased willingness to take risks, although Ethereum’s price is still consolidating. With leverage at high levels, prices can fluctuate significantly, but their direction remains uncertain. Sha Yan pointed out:
Driven by a highly leveraged environment, a breakout of this range is imminent and is expected to trigger significant price fluctuations.
Shayan elaborated that as more traders adopt higher leverage, the market becomes more Vulnerable to severe price fluctuations. That’s because if these leveraged positions were liquidated — whether through a short or long squeeze — it could trigger a sudden, Significant price adjustment.
The ongoing consolidation around $3,200 to $3,500 has heightened interest in Ethereum’s future prospects. CryptoQuant analysts wrote:
Given the current market sentiment, a bullish breakout seems more likely. However, traders should monitor leverage ratios closely as any sudden changes could lead to unexpected volatility and liquidations.
Ethereum market performance
At the time of writing, ETH is trading at $3,282, down 0.1% in the past 24 hours. Interestingly, despite mediocre performance Looking at ETH, the asset has seen considerable daily trading volume over the past week.
Last Wednesday, ETH’s trading volume was below $20 billion, but as of today, Ethereum’s daily trading volume is hovering above $24 billion. This is quite a opposite trend Especially compared with the market performance of ETH during the same period.
X Prominent cryptocurrency analyst Javon Marks said that Ethereum appears to be on the verge of a major surge to $12,000 as it behaves similarly to the Fibonacci levels seen in the previous bull cycle.
ETH (Ethereum) has performed similarly to the 1.618 Fib level in past bull cycles and could rise nearly +240% from here to $11,865.6 levels!
5-digit ETH may be on the way, which could help many altcoins enter a massive run
. pic.twitter.com/eJT1Fu986b
— Jiawen
Tag (@JavonTM1) December 29, 2024
Featured image created using DALL-E, chart from TradingView
