Ethereum's Price Drop Below $2300 Could Trigger $508M Long Liquidations

According to data from Coinglass, if the price of Ethereum falls below $2300, the cumulative long liquidation pressure on mainstream centralized exchanges (CEX) will reach $508 million. This significant figure highlights the potential impact on the market if Ethereum's price drops to this level. The liquidation pressure indicates the intensity of long positions that could be forced to close, leading to a cascade of sell orders and potentially driving the price down further.

Conversely, if Ethereum's price rises above $2500, the cumulative short liquidation pressure on mainstream CEXs will reach $744 million. This scenario suggests that a price surge could trigger a wave of short position liquidations, which might stabilize or even push the price higher as short sellers are forced to buy back their positions to cover their losses.

It is important to note that the liquidation chart provided by Coinglass does not display the exact number of contracts to be liquidated or the exact value of these contracts. Instead, the chart shows the relative importance of each liquidation cluster compared to adjacent clusters, indicating the intensity of liquidations at specific price levels. A higher "liquidation bar" on the chart signifies that the price will experience a more intense reaction due to a liquidity cascade once it reaches that level. This information is crucial for traders and investors to understand the potential market impact at critical price points.