Ethereum (ETH) is retesting the 200-day exponential moving average (EMA) from above today and risks a massive drop to $2K if this support falters.
Long liquidations in the past 24 hours have surged to almost $700 million as cryptocurrencies dipped on Saturday.
Over $1.2 billion worth of long positions have already been wiped out in the last three days, as the correction that started in late September has persisted for longer than expected.
ETH longs occupy the second place in the scoreboard with $170 million in long liquidations. Meanwhile, trading volumes stand at high levels at nearly $10 billion — a figure that accounts for nearly 3.5% of the asset’s circulating market cap.
The markets are already bracing for what could be a volatile week, as the Federal Open Market Committee (FOMC) will convene on Wednesday.
Although analysts do not expect another rate hike during this next meeting, the Fed’s post-meeting speech tends to trigger volatile moves across the markets.
Investors Have Withdrawn $1.2 Billion From Ethereum ETFs in October
Exchange-traded funds (ETFs) linked to ETH closed the week with a strong outflow of $110 million, while they have accumulated nearly $1.2 billion in outflows in October.
This marks a drastic shift from the $832 million in net inflows from last month. However, this would be the second consecutive month of declines for this metric.
Wall Street seems to be shunning cryptocurrencies once again, at a point when the market’s latest attempt to rally past key resistances failed.
Turning to on-chain metrics, the MVRV Ratio, a metric we have been tracking for months, turned negative once again. We got an encouraging bullish crossover above the zero line in mid-September, as cryptos rallied following the latest FOMC meeting.
However, we are back into negative territory, indicating that this could have been a low-conviction move fueled by FOMO rather than organic buying or a shift in the overall narrative that has been driving crypto prices lately.
The Ethereum blockchain is preparing for the rollout of the Glamsterdam upgrade during the fourth quarter of 2026.
The last major technical overhaul, the Pectra upgrade, provided a strong enough catalyst to push ETH out of bearish territory in May 2025. We’ll have to see if this upgrade manages to pull a similar stunt.
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See all Ethereum forecastsETH Faces Big Drop to $2K to Close Market Imbalance
Turning to the daily chart, ETH has hit the 200-day EMA and seems to be temporarily bouncing off this mark. Depending on whether the price action closes below or above this mark, we could see ETH dropping to much lower areas during next week.
If liquidity is insufficient to keep ETH afloat, the odds of a retest of the $2,000 level would be high, as there is a huge market imbalance at this psychological level.
Bearish momentum is quite strong, as the Relative Strength Index (RSI) sits at 34. Although this indicates that sellers are in control of the price action, it could be a signal that a bottom is nearby, as levels lower than 30 tend to precede a trend reversal.