In the wake of a broad market sell-off yesterday, numerous altcoins, including Ethereum, reached their crucial support levels. However, the sudden return of buyer interest in combating rising selling pressure saw ETH price rebound from its firm support zone. Currently, the price of Ethereum is showing bullish indicators on-chain, inspiring confidence among those who take long positions.
Ethereum flashed major capitulation signals
According to Coinglass’s ETH liquidation chart, Ethereum is experiencing both short and long liquidations due to its mixed price volatility. The data shows that the ETH price has seen a short liquidation of $4 million and a long liquidation of $10 million after a price move close to $1,630. This implies a fierce battle between bulls and bears to establish a definitive direction for the ETH price.
Interestingly, data from Santiment reveals a signal of capitulation to Ethereum. Amid yesterday’s massive price drop, investors turned to panic selling, with a majority of traders forced to exit at a loss. Notably, Ethereum, Shiba Inu and SushiSwap witnessed their peak levels of trader realization of losses (relative to profits) throughout the year. This signals a significant capitulation to Ethereum and other altcoins, serving as the primary catalyst for the recent rebound in ETH price.
However, Glassnode revealed some worrying data as the recent dip to a one-month low of 19,658.435 in the number of transfers (7d MA) could have a bearish impact on Ethereum’s price. A decrease in the number of transfers could indicate a reduced level of trading and transaction activity on the Ethereum network, which could be a result of higher gas fees on the network.
Furthermore, the six-month low in the number of addresses receiving ETH from exchanges, at 2,262,839, could indicate reduced buying activity or a tendency to hold assets on exchanges, putting selling pressure on Ethereum’s price.
What’s next for the ETH price?
Although ether saw a sharp decline against the resistance at $1,650, it has now recovered from the support at $1,610, indicating that bulls are strongly defending the support level. At the time of writing, ETH price is trading at $1,648, up over 1.9% from yesterday’s price.
The 20-day EMA is leveling at $1,641 and the RSI has risen past the midpoint, indicating an upside for buyers. If the price continues to rise from current levels, bulls are likely to attempt to break the USD 1,745 resistance again. Success in this move could see ETH price break out of the bearish zone and target $1,880.
Conversely, if the price makes a sudden reversal and falls below the support of the trendline at $1,610, it could indicate that the price may witness a heavy sell-off and test the support at $1,530.
