ETH swings between two liquidation traps; how dangerous is the $1.785 billion short liquidation intensity

According to the latest data, ETH is currently in a position “sandwiched” by liquidation intensity. If it breaks above $3,314, the cumulative short liquidation strength on mainstream CEXs will reach $1.785 billion; if it falls below $3,002, the cumulative long liquidation strength on mainstream CEXs will reach $1.016 billion. Currently, ETH is priced at $3,157.99, exactly between these two key levels.

The Actual Meaning of Liquidation Intensity

Liquidation intensity reflects the risk exposure in the derivatives market at a specific price level. When the price breaks through a certain point, traders with opposite bets face forced liquidation. The $1.785 billion short liquidation strength above indicates that if ETH breaks above $3,314, approximately $1.785 billion of short positions will need to be forcibly closed. This often further pushes the price higher, creating a positive feedback loop.

In contrast, the $1.016 billion long liquidation strength below is much smaller, indicating that short positions have greater risk exposure.

Implicit Signals of the Current Price Position

ETH’s position between the two liquidation levels forms a relatively balanced market state. However, the asymmetric liquidation intensity hints at a tilt in market sentiment: greater risk for shorts.

Recent Trends and Risk Assessment

Based on the latest market data, ETH has decreased by 3.88% in the past 24 hours but increased by 6.25% over the past 7 days. This indicates short-term pressure, but the medium-term trend remains relatively strong. The market’s 24-hour trading volume is $2.241 billion, down 18.82% from the previous day. The shrinking volume may signal an upcoming directional decision.

From the price position, there is only about $157 of space (+4.93%) to the upper liquidation level, and about $156 (-4.92%) to the lower liquidation level. This means that a breakout in either direction could trigger large-scale liquidations with only modest price movements.

Possible Market Developments

If ETH continues to break above $3,314, the $1.785 billion short liquidation could trigger a “short squeeze,” potentially pushing prices higher. However, this requires sufficient buying support. Conversely, if the price falls below $3,002, although the liquidation strength is smaller, it could trigger more stop-loss sell orders.

The key market question is which side will gain the momentum to break through first. The shrinking volume indicates market hesitation, waiting for a clear directional signal.

Summary

ETH is currently in a highly sensitive position, with liquidation traps on both sides. The $1.785 billion short liquidation strength above is more noteworthy, as it represents greater market risk and potential for accelerated upward price movement. However, the declining volume suggests the market may be consolidating, and a decisive breakout might still be brewing. Investors should closely monitor the breakthroughs of $3,314 and $3,002.