Ethereum Dips Below $3,300 As Crypto Liquidations Surge – What Next?

As Bitcoin (BTC) dropped below $93,000 earlier today, Ethereum (ETH) tested a key support level above $3,300. The leading altcoin, with a fully diluted valuation of about $399 billion, fell nearly 5% in the last 24 hours, trading around $3,315 during the early hours of Tuesday’s New York session.

The crypto market’s heightened volatility saw over $95 million liquidated from Ether’s leveraged positions, mostly impacting long traders. Adding to the uncertainty, Ethereum’s Open Interest (OI) recently surpassed $20 billion for the first time, signaling more potential price swings in the near term.

On-Chain Activity Increases

Ethereum’s network activity has surged recently, even as it faces stiff competition from other blockchains like Solana (SOL) and Tron (TRX). Data from The Block shows Ethereum’s USDT transfers overtook Tron’s for the first time this year, driven by a 62% spike.

According to DeFiLlama, Ethereum’s stablecoin market cap now exceeds $100 billion, led by Tether (USDT). Meanwhile, Tron’s stablecoin market cap stands at around $58 billion, also dominated by USDT.

Whales Send Mixed Signals – Why?

Meanwhile, Ether whales have shown mixed reactions in the recent past amid anticipation of a further bullish breakout. For instance, the US spot Ether ETFs have flipped positive in the past two days after registering notable cash outflows last week. On the other hand, Flow Traders deposited 6k Ether, worth over $20 M today, to OKX and Coinbase, and still hold nearly $50M in account balance.

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Midterm Targets

Prominent crypto analyst Ali Martinez predicts that Ethereum is gearing up to form a new higher high after recent consolidation. Additionally, the ETH/BTC trading pair is showing a macro reversal pattern, supported by a bullish divergence on the daily Relative Strength Index (RSI).

Ethereum’s next move depends on holding the support level near $3,257. A failure to maintain this level could see prices dip to the next significant support around $3,028 before rebounding toward $4,000. On the flip side, consistent closes above the current support would strengthen the bullish outlook and pave the way for further gains.

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The battle between Ethereum’s network strength and market challenges continues – the outcome could surprise us all.