Ethereum price sits at key level as shorts liquidations rise

• Ethereum joined the broader cryptocurrencies rally on Friday.

• More short-sellers continued to liquidate their positions.

Ethereum (ETH/USD) price joined Bitcoin in its remarkable comeback on Thursday. It rose to a high of $1,696, which was close to the highest level since September 2022. ETH has jumped by over 56% from the lowest point in 2022. 

Shorts liquidations

Ethereum and Bitcoin prices jumped because of increased liquidations by short-sellers. Data compiled by CoinGlass showed that BTC shorts liquidations jumped to over $140 million on Wednesday. This compared with bulls liquidations of less than $20 million. 

The same is true with Ethereum, whose short liquidations rose to $42 million. Most of thos liquidations came from OKX followed by Binance and Huobi. Longs liquidations came in at just $3.64 million. In most periods, Ethereum tends to rise when short-sellers liquidate their trades. 

Ethereum price also rose because of the likely possibility that Binance will settle with the Securities and Exchange Commission (SEC), This view was shared by the company’s chief strategy officer who talked with the Wall Street Journal (WSJ). 

A settlement would be a good thing for both Binance and the crypto industry because it will end one of the biggest clouds hanging in the sector.

Meanwhile, risky companies in the US have started to do well, which is a sign that retail traders are back. On Monday, QuantScape, Upstart, Roblox, and Wish jumped by more than 20%.

Still, the biggest risk for Ethereum is monetary policy and regulations. Data published this week showed that America’s inflation remained high in January while retail sales jumped. As such, these numbers could fuel a new wave of a hawkish Federal Reserve. 

Ethereum price prediction

ETHUSD chart by TradingView

On the daily chart, we see tha the ETH/USD price has been in a consolidation phase in the past few weeks. In this period, it has remained between $1,665 and $1,462. This was a notable range since it was the highest point in November last year. Now, it seems like Ethereum is attempting to move above this level of resistance.

Ethereum has moved above the 50-day moving average. Therefore, there is a likelihood that the stock will have a bullish breakout. If this happens, the next key level to watch will be at $1,795 (September 12 high). Flipping this resistance into support could move to the key resistance at $2,027 (August 14 high).

However, a drop below the support level at $1,468 will invalidate the bullish view. It will signal that there are more sellers in the market. 

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