Ethereum (ETH) traders have encountered a rough start to October, with losses exceeding $96 million following heightened tensions in the Middle East that caused a downturn in the crypto market. This volatility led to the liquidation of over $500 million in positions, particularly affecting long traders of Ethereum.
On Monday, Ethereum’s price dropped to $2,447, marking its lowest point in ten days. This unexpected decline resulted in the liquidation of numerous long trades, which were initially opened in anticipation of a price rally.
Liquidation occurs when an asset's value declines against a trader's position, leading exchanges to forcibly close the position due to insufficient funds. On Monday alone, ETH long traders faced $96 million in liquidations, the highest single-day figure in 57 days.
Despite recent challenges, ETH futures traders are still opening long positions. The funding rate for Ethereum remains positive at 0.0052%, indicating a stronger demand for long positions compared to shorts.
Ethereum’s technical setup reveals a shift in market control, with readings from the daily chart suggesting bears are gaining dominance. The Elder-Ray Index has turned negative for the first time since September 11, signaling bear strength.
Additionally, the MACD indicator shows that the MACD line has crossed below its signal line, indicating a bearish outlook and the potential for further price declines.
If selling pressure continues, Ethereum's price may retest its August 5 low of $2,112, representing a 15% drop from current levels. However, should the market trend improve, bulls could regain control and push Ethereum’s price toward the resistance level of $3,101.
