Ethereum News Today: Ethereum Price Surges 5.36% as Bull and Bear Traps Repeat July Pattern

Ethereum has repeated a technical pattern observed in July, marked by a series of bull and bear traps that have set the stage for a potential strong upward move. The price of ETH has surged past $3,800, reaching $3,820.99, reflecting a 5.36% gain over the past 24 hours with a trading volume exceeding $26.6 billion. Analysts have noted the similarity between the current structure and the one that preceded a sharp rally in early July [1].

The pattern began with a false breakout above key resistance levels, luring in breakout traders before reversing quickly and liquidating long positions. This was followed by a drop below support, which attracted short sellers expecting a further decline. However, a sudden bounce trapped these short positions, forcing them to cover as the price rebounded [1].

Merlijn The Trader, a crypto market analyst, highlighted this sequence on social media, stating that Ethereum has executed a "textbook" combination of bull and bear traps, effectively shaking out both long and short traders. The analyst emphasized that this structure clears both sides of the market, providing the necessary liquidity for the next upward move [1].

The current setup aligns closely with the pattern seen in July, where similar technical conditions led to a sharp price increase. With short sellers now trapped and forced to buy the asset to limit losses, the upward momentum could be further accelerated by renewed market participation and fear of missing out (FOMO) [1].

The resurgence above key resistance levels has opened the door for Ethereum's next phase of price action. Traders are closely watching the market for signs that the pattern will continue, with the expectation that momentum and forced buying will drive the price higher. This technical behavior underscores the role of liquidity hunting in shaping short-term market trends [1].

Short sellers are currently fueling the rally, creating rapid momentum supported by rising trading volume. As the market digests the recent price action and sentiment remains cautiously optimistic, Ethereum is in a position to continue its upward trajectory, driven primarily by its technical structure rather than external catalysts [1].

The repeated execution of these liquidity traps suggests a strategic shift in market dynamics, where both bulls and bears are being systematically removed from the equation, leaving room for a more aggressive price movement. If the pattern holds, Ethereum could experience another sharp rise, mirroring the July breakout and reinforcing the current bullish bias among traders [1].

Source:

[1] Ethereum Repeats July Bull and Bear Traps Setup as Price Surges Past $3,800 (https://cryptofrontnews.com/ethereum-repeats-july-bull-and-bear-traps-setup-as-price-surges-past-3800/)