Ethereum is currently trading below $1,800 as traders anticipate the U.S. CPI data and signals from the Federal Reserve. Analysts suggest that a breakout above $1,850 could potentially trigger significant short liquidations and pave the way for a rally towards $2,200.
Currently, Ethereum is hovering around $1,780, having dipped briefly to about $1,770 due to recent geopolitical tensions in the Middle East. The associated rise in oil prices has heightened concerns over persistent inflation, especially in light of the upcoming CPI report and Paul Warsh's congressional testimony.
Any unexpected upward surprise in inflation data could strengthen hawkish sentiments from the Federal Reserve, which may dampen demand for risk assets. This would complicate Ethereum's efforts to overcome the $1,800 resistance level.
Despite this, derivatives positioning suggests a more nuanced outlook beyond price movements. According to CoinGlass data, there is a significant cluster of short liquidations between $1,800 and $1,850, with further liquidity around $1,900. A decisive upward movement through these levels could compel short sellers to cover their positions, thereby accelerating momentum towards higher resistance levels.
On the downside, liquidation pockets around $1,750 indicate that sellers could regain control if support fails. Ethereum's daily chart displays a double-bottom formation as prices rebound from June lows, with resistance near $1,846.
As momentum remains constructive in the short term, the 4-hour chart shows Ethereum trading above Supertrend support at $1,756, maintaining a series of higher lows. However, the MACD histogram has weakened, suggesting that upward momentum is slowing as the price nears resistance.
Market participants are keenly observing these technical levels. Analyst Ali Martinez has expressed a bullish outlook, stating he will go long on Ethereum if it breaks above $1,850.
This article is for informational purposes only and does not constitute financial advice.
