Key Takeaways:
- Ethereum (ETH) price fell 7% on Thursday, hitting $2,100 and triggering $144 million in long liquidations.
- A break below $2,000 could trigger over $2.5 billion in additional long liquidations.
- The 50-day moving average near $2,100 is a key level to watch.
Ethereum Faces $2.5 Billion Long Liquidation Risk
ETH saw a daily loss of 7% on Thursday, with ETH/USD falling to as low as $2,140, according to TradingView data.
Ethereum's pullback coincided with a massive wave of long liquidations across the crypto market, totaling $492.8 million in the past 24 hours. As ETH's price slid to $2,100, over $144 million in long positions were liquidated.
If spot and institutional buyers do not return swiftly, Ethereum's downward momentum could accelerate.
Ethereum's downside could hinge on the $2,000 support level, according to CoinGlass, with a break below this mark potentially triggering over $2.5 billion in leveraged long liquidations across all exchanges.
This would mean a substantial number of bullish bets being wiped out, adding to Ethereum's downside pressure should market sentiment turn bearish.
ETH Price Highly Sensitive to FOMC Risk
The chart below shows that ETH/USD has declined after seven of the last eight FOMC meetings, forming one of the most pronounced macro-driven patterns historically.
Ethereum typically stabilizes or rallies into the meeting, only to experience sharp declines after the decision and related commentary are released.
Typical post-FOMC pullbacks range between 16% and 23%, with deeper deleveraging phases pushing ETH price losses to between 33%-43%.
If the price breaks above this level, it could approach the triangle's measured target of $2,700, a 24% increase from current prices.
Conversely, failure to hold above $2,100 would invalidate the current pattern and push ETH/USD back towards the triangle's support line near $2,000, while also risking a broader recovery.