Ethereum price broke and consolidated below the $2,500 level on Tuesday, May 20, aligning with the tepid momentum in the broader crypto market. Key technical indicators shows that ETH price could be at risk of massive liquidations if the $2,300 support caves.Â
Ethereum (ETH) Halts Below $2,500 as Market Awaits Further Signals
Ethereum (ETH) price stagnated below $2,500 on Tuesday, down 1.8% from its recent weekly high. According to CoinGecko, ETH briefly touched $2,588 intraday before retreating to $2,482 at press time.
This cooling mirrors the broader altcoin sector, where only Solana (SOL) and Tron (TRX) posted considerable gains, up 1.7% and 2.3%, respectively. With the Trump-China trade deal facing new hurdles and institutional sentiment uncertain, many investors are awaiting the U.S. Fed’s June rate decision and the SEC’s pending verdict on altcoin ETF applications slated for June 16.
Ethereum Technical Analysis: Parabolic Moves Above $2,700, But $2,300 Buy-Wall Looms Large
On the daily chart, Ethereum’s Parabolic SAR now rests at $2,722, well above current price action. This signals that with ETH now trading below $2,500 and printing consecutive lower highs, buyers appear cautious.
The Relative Confidence Index (RCI) Ribbon shows short-term bearish divergence: the fast line has slipped to -36.97, while longer-term values remain elevated (87.72 and 74.41). This divergence suggests a potential shift in short-term sentiment, even as medium-term trends hold bullish.
The $2,339 mark is acting as a psychological and structural support floor—highlighted by previous consolidation zones and high-volume node activity. If ETH price breaks below this line, bears may target $2,100 next.
However, so long as bulls defend $2,300, the broader uptrend from May remains intact, especially with ETF catalysts and macro signals still developing.
Ethereum Derivatives Markets Signal Cautious Optimism, But Longs Face Liquidation Risks
Derivatives data paints a mixed outlook for ETH. While open interest climbed 1.72% to $30.94 billion, trading volume dropped sharply by 34.79% to $89 billion—signaling cooling conviction among active traders. Options volume also declined 32.62%, despite open interest remaining steady near $7.69 billion.
The long/short ratio on Binance is 0.9849, suggesting balanced sentiment, but deeper breakdowns show top traders heavily skewed long, with a 2.77x account-based long/short ratio and a 2.68x position-based ratio.
Liquidation data reflects rising risk. In the past 24 hours, over $64.37 million in ETH derivatives were wiped out—$35.46 million from longs and $28.90 million from shorts. The most recent 1-hour window saw $1.54 million rekt, with long positions contributing 28% of that.
Despite bullish leverage from whales, the declining volumes and increasing rekt totals, especially $22.35 million in long liquidations over the past 12 hours, signal fragility.
If ETH breaches $2,300, cascading liquidations could accelerate downside pressure potentially driving prices towards the $2,100 level.
Frequently Asked Questions (FAQs)
Ethereum is trading near critical support. If $2,300 breaks, increased liquidations could push ETH toward $2,100 in the short term.
Lower trading volume suggests reduced participation or caution, even as some whales continue to hold long positions with high leverage.
It shows top traders are heavily long. While this can support rallies, it also increases risk of cascading liquidations on downturns.
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