Ethereum Price Prediction: ETH Eyes $2,250 After Confirmed Short Squeeze

Ethereum (ETH) has gone up by more than 10% in the past 24 hours following President Donald Trump’s State of the Union (SOTU) speech.

Short liquidations during this same period have spiked by over $300 million, increasing the odds of a short squeeze as ETH has surged past the $2,000 mark for the first time in 10 days.

This has been the highest single-day short liquidation since February 5, back when ETH bounced off $1,800 as well.

ETH Daily Liquidations – Source: CoinGlass

The price’s strong reaction at this level for a second time confirms that the volume of buy orders at that level was quite high.

Trading volumes confirm this, as $21 billion has exchanged hands in the past 24 hours. This figure accounts for nearly 9% of the token’s circulating market cap.

Early MVRV “Buy” Signal Confirmed as ETH Bounces Off $1.8K

As we emphasized in yesterday’s ETH price forecast, the $1,800 level was a make-or-break demand zone for the top altcoin.

Ethereum MVRV Ratio (30D) – Source: Santiment

We were already seeing early signs of a potential trend reversal as the token’s MVRV Ratio started to climb.

In three previous instances, a divergence between this on-chain metric and the price action typically preceded a shift in the prevailing trend.

The most likely target for ETH if the uptrend continues over the next few days would be $2,250, meaning a 9.2% upside potential.

ETH/USD Daily Chart – Source: TradingView

This might be the beginning of a normal mean reversion move toward the 200-day exponential moving average (EMA) as sellers went too far.

The daily Relative Strength Index (RSI) further confirms this view as it has moved above the 14-day moving average, which is typically interpreted as an early “buy” signal.

Currently, the 200-day EMA sits at $3,000, which sounds like the ideal target for a relief rally. For that to happen, ETH would have to break past the $2,250 barrier.

Buy Signal Pops Up as Potential Mean Reversion Kicks Off

A powerful buy signal has popped up in the 4-hour chart today, as trading volumes during the American session spiked.

ETH/USD 4H Chart – Source: TradingView

This system tracks “decisional” candles that feature above-average volumes, a clear trend direction, and a specific candle pattern.

Paired with another metric called “Mean Reversion Oscillator”, we could be witnessing the beginning of a strong trend reversal for ETH. That said, the price needs to stay above $1,800 to keep rallying.

Otherwise, as we also stated yesterday, a break below that mark could set off a deeper correction to $1,600.

We have been mentioning for a few weeks that contrarian signals have been piling up, increasing the odds that a cycle (or at least local) bottom was nearby.

Extremely negative sentiment readings and depressed social volumes were two of the indicators we tracked to potentially determine when this bearish cycle could be coming to an end.