Ethereum Flashes Warning Signal – Traders Brace for a Big Move

Ethereum entered Wednesdays session under renewed pressure, with the market teetering at a critical technical level while liquidations climbed sharply across major derivatives exchanges.

Key Takeaways:

• ETH faces pressure after $108M in liquidations.
• Price is testing the crucial weekly 50 EMA support.
• Momentum indicators show weakness, not collapse.
• Analysts say ETH is back in its fair value zone.

The second-largest cryptocurrency is trading near $3,380, extending a week-long decline that has pushed the asset directly onto what several analysts describe as its most important support zone of 2025.

Heavy Liquidations Hit the Market

According to derivatives data from the morning session, $108.7 million worth of ETH positions were liquidated in the past 24 hours, split between:

• $59.22 million in long positions
• $49.54 million in short positions

The near 50-50 split highlights growing indecision in the market, with leverage steadily unwinding as traders reassess ETHs trajectory following a broader downturn across digital assets.

ETH Falls Back to Weekly 50 EMA – A Level That Defined the Previous Year

Well-known market commentator Merlijn the Trader noted that Ethereum has now descended onto the weekly 50-day EMA – a technical level that acted as resistance for more than a year before being reclaimed in mid-2025.

He described the area around $3,350–$3,500 as a “make-or-break zone.”

ETHEREUM: MAKE OR BREAK.$ETH is sitting on the weekly 50 EMA.

This level was resistance for over a year.

Now its being tested as support.

If the level fails to hold, momentum could fade quickly, opening the door to deeper retracements toward the mid-$2,000s. But if bulls defend the EMA, Merlijn said, ETH still has enough structural strength for another upward push.

Market Indicators Flash Neutral to Weakening Signals

The 4-hour chart shows ETH gradually grinding lower over the past several weeks, with neither side establishing dominant control.

Key indicators include:

• MACD: hovering below the signal line, showing waning bullish momentum
• RSI: sitting near 42, indicating mild bearish pressure but far from oversold territory
• Price structure: forming a series of lower highs since the October peak

The setup reflects a consolidation phase rather than outright capitulation.

Fair Value Zone Reentered, Analysts Say

Another prominent analyst highlighted that ETH has now dropped back into what he calls the “fair value zone,” based on long-term Fibonacci models. According to this view, any move significantly lower would shift Ethereum into undervalued territory, which historically has been a region associated with high accumulation from institutional traders.

$ETH is now in the fair value zone.

That perspective aligns with the slowdown in aggressive selling despite the broader market correction. While volatility has picked up, on-chain data suggests long-term holders are not exiting positions at scale.

Whats Next for Ethereum？

The next few sessions appear pivotal. Ethereums price is now pinned between a major technical support and a market sentiment dynamic that is weakening but not broken.

If ETH holds the weekly 50 EMA:

• Buyers may regain confidence
• Short liquidations could fuel a rebound
• The asset may attempt another move toward the $3,800–$4,000 zone

If ETH loses the level:

• The fair-value boundary could break
• Price may slide into undervalued territory
• The $2,800–$3,000 region becomes the next high-probability target

For now, all eyes are on whether Ethereum can maintain its footing at this long-respected technical pillar. With over $100 million in liquidations clearing out leverage, the market may soon reveal its true short-term direction.

Alexander Zdravkov is a person who always looks for the logic behind things. He has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.