Ethereum (ETH) continues to approach the $4,000 mark, attracting traders' attention. Questions around market liquidations and exchange reserves create an interesting outlook for ETH's future.
Potential Liquidations of Ethereum
Currently, over $1.2 billion worth of liquidations is at stake due to short positions betting against ETH's price. These positions lie between $3,950 and $4,050. If ETH exceeds $4,000, it may trigger a "short squeeze", forcing short position traders to buy ETH to close their trades, which could drive the price up. Right now, ETH is around $3,900, just 2.8% below this critical level.
Current Selling Situation of ETH
One indicator of ETH's potential rise is the amount of Ethereum tokens on exchanges. In the past month, reserves have dropped from 20 million to under 19 million ETH, despite the price increase. This may suggest that ETH holders are not rushing to sell. However, there was a notable transaction involving a deposit of 12,000 ETH linked to HashKey Capital, yet this is a single event against the overall trend of low reserves, which are often a positive sign for prices.
Prospects for Reaching Historical High
Should Ethereum break the $4,000 mark, the next key target may reach $4,877, which was its previous all-time high achieved in November 2021. The existing liquidation structure and increasing use of ETH in decentralized finance could bolster the bullish case for growth. The total value locked in Ethereum-based DeFi applications now stands at approximately $85.9 billion, signaling ongoing use of ETH beyond mere speculation.
The overall liquidation fund and ETH reserve dynamics create a favorable backdrop for a potential break above $4,000. Should Ethereum surpass this value, it will be a benchmark for reaching new records, and investor attention is now focused on its upcoming market activities.
