Ethereum price: Analyst points to potential short-squeeze

• Ethereum price traded near $2,600 as crypto experienced a brief lull.
• A CryptoQuant analyst says ETH could witness a short squeeze, but points to $2.7k as key resistance.

Ethereum traded to near $2,750 on Oct. 21, rising amid broader gains for the crypto market as Bitcoin shot past $69,000. However, with BTC dipping, the ETH price followed suit and tested support near $2,600.

The price of Ethereum has returned above $2,620, and a CryptoQuant analyst says the top altcoin could see a short squeeze scenario. According to Shayan B, this outlook results from the rising leverage. If the bulls manage to break out above the supply wall around $2.7k, then ETH price could rise further.

Ethereum price outlook

Currently, the market seems bearish on ether price prospects, which means many traders expected a downside continuation. But with “leverage at concerning levels,” a short squeeze would mean unexpected price surge and major liquidations.

ETH would notch gains in such a case.

“With leverage at concerning levels, the futures market is now considered overheated. This leaves Ethereum vulnerable to a potential short-squeeze event. In such a scenario, if ETH’s price rises unexpectedly, traders with short positions could be forced to cover their positions by buying back ETH, creating an impulsive price spike,” the analyst noted .

The key level however remains at the 100-day moving average near $2,700. This area presents a notable resistance area that bulls may have to conquer to see further gains.

Ethereum Faces Short-Squeeze Risk: Rising Leverage and Key Resistance at $2.7K

“With leverage at concerning levels, the futures market is now considered overheated. This leaves Ethereum vulnerable to a potential short-squeeze event.” – By @ShayanBTC7

👇 https://t.co/LBeV3Lis4d pic.twitter.com/wUZ2sEowmW

— CryptoQuant.com (@cryptoquant_com) October 22, 2024

Data from Coinglass showed total 24-hour crypto liquidations stood at over $165 million.

Most of this, about 75% were long positions rekt over the past 24 hours at $129 million. Shorts accounted for about $36 million. Looking at Ethereum, data showed longs accounted for $36 million of the total $39 million liquidated over the past 24 hours.

ETH price reached its year-to-date peak of $4,070 in March.