Traders who have taken short positions on Ethereum (ETH) will be at risk if the price of the second-largest coin by market cap crosses above $5K. With Ethereum prices rising higher, traders who took short positions, worth around $8 billion, are at risk of being liquidated if the price of the coin surpasses the $ 5,000 level.
As the Altcoin Season Index (ASI) has moved significantly towards the altcoin season side of the ASI, the market’s attention has shifted towards the altcoins from Bitcoin. The ASI, which was more aligned with the Bitcoin season at 48, has moved to 57, leaning more towards the altcoin season, signaling an oncoming altcoin season.
When the altcoin season is in full swing, funds from Bitcoin flow into Ethereum and the rest of the altcoins, and the altcoins start to outperform Bitcoin. With the altcoin season coming fast and hard, nearly $8 billion worth of short positions are at risk of being forced liquidated.
Traders who take short positions bet against Ethereum’s rising price or expect the prices to fall. However, if the market goes against them and the prices keep rising, their position will be force-liquidated because they don’t have enough margin (collateral) to cover their losses.
Will Ethereum cross above $5K?
We will take a look at the probability of Ethereum crossing above the $5K level while fundamentally and technically analyzing the market.
After crashing below the 600K level, the daily active addresses on Ethereum has once again started to increase. When new and existing users are transacting more, it often signals confidence in Ethereum’s ecosystem. Rising demand increases ETH’s utility and long-term value.
In addition to this the total value locked (TVL), which is the total amount of coins staked in the protocol has been increasing, although the rate of increment has been reducing. The 50 Simple Moving Average (SMA), 100 day SMA and 365 day SMA are all point upwards, depicting the confidence of the ETH community, who bet on their money. So on the fundamental front, ETH is set for big moves in the upward direction.
On the technical side, Ethereum is trading inside a bullish ascending triangle, with a flat top and a rising bottom. Inside the triangle, buyers steadily gain strength while sellers repeatedly defend the same ceiling, creating pressure and consolidation as trading volume tapers off. This buildup often leads to an upside breakout above resistance, signaling continuation of the uptrend, with the breakout target usually projected by the triangle’s height.
Will Ethereum cross above $5K?
Despite falling below the 50-day moving average (yellow line) and the lower trendline, the bulls are on the prowl and ETH has already formed a green candlestick, which means ETH’s downwards movement will come to an end and the upwards motion will start. Eventually, as the bull pressure builds ETH will fall back into the ascending triangle and breakout once the pattern is completed. This will, liquidate the short positions of the market.
