Ethereum News Today: Ethereum Drops 4% Amid Short Positioning Surge

Ethereum, the second-largest cryptocurrency by market capitalization, is currently trading at approximately $3,573.82, having retreated from a recent high of $3,728. This decline is accompanied by a notable increase in short positioning, indicating a shift in market sentiment. The price action aligns with the Wyckoff reaccumulation model, suggesting that Ethereum is in the “jump across the creek” phase, a critical stage where the asset may experience significant price movements.

Market activity reveals a strong liquidity cluster forming between $3,680 and $3,730. This range is absorbing significant order volume and aligns with recent resistance levels, which previously capped upward momentum. If the price reaches this zone again, filled orders may trigger sharp movement toward the $3,800 mark. Above $3,730, order activity decreases until the $3,871 range, indicating potential resistance levels that could influence future price movements.

Ethereum's recent price action has been characterized by volatility, with sharp reversals observed in both directions. Despite brief recoveries, downward pressure has continued, reflecting the market's uncertainty. The volume-to-market cap ratio stands at 10.88%, showing moderate relative activity. This suggests that while there is interest in Ethereum, the market is not experiencing extreme levels of participation.

The liquidity concentration around $3,700 is a critical factor to watch. If Ethereum can break through this resistance level, it may experience a significant upward movement. However, if the price fails to surpass this barrier, it could face further downward pressure. Market participants continue to load limit orders above the current price, positioning near the yellow cluster, which indicates bullish sentiment despite the recent retracement.

Ethereum's price action aligns with a Wyckoff reaccumulation pattern, following a multi-month consolidation between two key price levels. After declining through a downward-sloping range marked “creek,” Ethereum formed consecutive lower highs before reaching a low near $2,000. Following the “spring,” Ethereum rebounded and retested the support area, confirming the lower boundary of the trading range. A Last Point of Support (LPS) was then developed, marking a crucial structural shift before the price moved upward. Ethereum has now moved above the “creek,” entering the “jump across the creek” phase of the Wyckoff model.

The top boundary of the range remains just under $4,000. If this area holds during upcoming retests, Ethereum may target new upside levels. The inset diagram mirrors the main chart’s labeled phases, providing a visual representation of the price action and potential future movements. This analysis suggests that Ethereum is at a pivotal point, with the potential for significant price movements in either direction depending on how it navigates the liquidity cluster around $3,700.