출처: Block Media
Ethereum Faces Risk of Short-Term Correction After Key Support Breakdown
Ethereum (ETH), a leading force behind July’s cryptocurrency rally, is showing bearish signals as it slips below a crucial technical support level. Following a pullback from its $3,800 peak, profit-taking activity has increased selling pressure on the cryptocurrency, sparking debate within the market about its short-term trajectory. While certain technical indicators suggest the potential for a rebound, uncertainty prevails as traders brace for higher volatility in the days ahead.
According to analytics firm Material Indicators, Ethereum closed below the Timescape support level at $3,640 on July 24, marking a significant shift since June 1. Analysts now warn of the possibility that ETH could test its next major support at $3,450—its year-to-date opening price and a level that has historically triggered buying interest. This zone is emerging as a critical battleground for Ethereum’s near-term trend.
A Breakdown Signals Exhaustion in Ethereum Rally
The price range between $3,450 and $3,640 has served as a pivotal support band in recent months, propelling Ethereum’s bullish momentum. However, ETH’s inability to hold the $3,640 level as of July 22 hints at the onset of an exhaustion phase, raising the likelihood of a deeper correction.
Material Indicators also flagged broader warning signs, highlighting alarmingly high levels of leverage across derivatives markets for Bitcoin and major altcoins. This excessive leverage creates conditions where minor shifts in market demand could spark rapid sell-offs, intensifying Ethereum’s downside risks and complicating a potential recovery.
Is a Rebound Still on the Horizon?
Despite mounting pressures, not all indicators favor imminent bearish outcomes for Ethereum. Material Indicators revealed subtle signs of declining downward momentum, alongside potential early signs of a recovery attempt. If ETH can recapture the $3,640 level, it could validate a “support-confirmation scenario,” creating the foundation for a renewed uptrend.
Speculation across the crypto market also suggests that Ethereum may establish a short-term bottom within the $3,450–$3,500 zone. From there, ETH could attempt to recover and aim for its $3,800 high once again, keeping bullish sentiment alive amid brewing uncertainty.
Futures Market Signals Highlight Overextension Vulnerabilities
Ethereum’s derivatives market introduces additional risks, as the token accounts for 38% of total cryptocurrency open interest—underscoring its influence in speculative trading. Current futures funding rates also reveal a bias toward long positions, indicating traders are leaning heavily on bullish expectations.
However, this leverage-driven optimism poses a double-edged sword. While high leverage can amplify upward momentum, it significantly increases the chances of liquidation-triggered sell-offs should market sentiment deteriorate. Any retracement could trigger cascading liquidations of stop-loss orders, further intensifying downward price movements.
$3,640: A Psychological and Technical Battleground
Material Indicators emphasize the dual role of the $3,640 level—not only as a key technical line but also as a psychological pivot point. Analysts argue that this level could determine Ethereum’s broader price trend. “The current dip might allow the market to reset and regain health,” Material Indicators stated. “However, it could also act as an inflection point for a trend reversal. Consolidation near $3,640 will offer key insights into Ethereum's next move.”
As ETH grapples with this critical juncture, both investors and traders remain alert. Many are weighing conflicting signals of consolidation and recovery while accounting for higher risks tied to the leveraged market landscape. Regardless of how the situation unfolds, heightened volatility will likely dictate Ethereum’s journey through this challenging phase.
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