Ethereum (ETH) has bounced by 1.3% in the past 24 hours, following a strong drop on Thursday triggered by Binance’s massive hack.
Over $6 billion was stolen from the world’s largest crypto exchange, causing a market-wide decline and hundreds of millions of dollars in blown-up long positions in the futures market.
Long liquidations hit $1.7 billion in just two days as a result of the move. When this happens, the price of crypto assets tends to drop sharply as market makers can dump the hedges that covered these positions in the futures market.
This is known as “cascade liquidation” and could exacerbate the magnitude of an upward or downward price move.
Macro Backdrop Takes the Back Seat as the Fed Kept Rates Unchanged as Expected
Even though the Binance hack was the largest in history, its impact on market fundamentals is relatively limited, as this is a company-specific situation.
Hence, we continue to focus on the price action at a point when the macroeconomic backdrop has taken the back seat. This week, the U.S. Federal Reserve opted to keep rates unchanged as the market expected.
As a result, there’s some breathing room between Wednesday and the next meeting of the Federal Open Market Committee (FOMC) in early December.
The baseline scenario at this point is that rates will be raised by 25 basis points again. If that changes and the odds of a rate hike drop significantly, that could drive crypto prices higher in the near term.
Even if that’s not the case, we still see a scenario in which crypto prices start recovering during this period, especially as most tokens, including Ethereum (ETH), are approaching key support levels.
Ethereum Price Forecast
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See all Ethereum forecastsETH Would Enter a “Hot” Buy Zone If It Drops to $2,075 – $1,935
Looking at the daily chart, ETH has partially corrected a huge market imbalance left behind during the late-August rally.
ETH/USDT Daily Chart – Source: TradingView
We emphasized in a previous Ethereum price prediction that the token seems to be replaying the price action of April – May 2025, back when the Pectra upgrade was about to be released.
This time, the Glamsterdam upgrade could be the driver that ETH needs to start recovering, but market makers will probably try to push the token to lower areas to fill as much of this imbalance as they can.
We see the ideal “buy zone” for ETH if that historical pattern repeats at around $2,075 and $1,935. The odds of a strong rebound off this area are quite high, considering the significant volume of buy orders that are probably sitting there.
Market conditions have not deteriorated significantly, aside from some minor headwinds that were already on the table when the August rally started.
If that rebound materializes, the first stop for ETH would probably be $2,400, to retest that key area from below. If the token recaptures that level, it is highly likely that the uptrend will resume.
Yesterday, we saw a strong reaction in the price action after hitting the first portion of this large imbalance. A long lower wick indicates that the buying pressure rose as ETH hit this mark.
If the price starts rising rapidly during the weekend, we expect this to be a strong signal that the market is ready to recover.