Ethereum Between a Rock and a Hard Place
Ethereum (ETH) is experiencing significant technical tension after the formation of a head and shoulders pattern on the daily chart, with a warning of a potential decline of 20% to a level of $2,300 if the $2,780 support fails. This follows the break of the neck line at $2,880 on January 25, raising concerns among investors about further declines.
However, data indicates a shift of capital from Bitcoin to Ethereum, after the WLFI fund converted approximately $8 million from Bitcoin into 2,868 ETH, a move that often coincides with short-term price rebound expectations. Meanwhile, whales continued to offload some assets while long-term investors keep accumulating dips, which helped stabilize the price temporarily.
In the derivatives market, short positions significantly outnumber long positions in the ETH-USDT market on Binance, indicating that any price breakout above $3,020 could lead to forced buying of shorts worth approximately $700 million, with subsequent pressure levels at $3,170 and $3,270. Conversely, failure to break above this price would confirm the bearish scenario and open the path towards the target at $2,300
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