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The market is nervous as Ethereum continues to rise, with over $835 million in short positions ready to be liquidated if $ETH reaches $4,000. The price chart for Ethereum and the provided liquidation heatmap demonstrate the high stakes that are currently surrounding the second-largest cryptocurrency. Significant groups of brief liquidations between $3,800 and $4,000 are visible on the liquidation map.
The cumulative short liquidations jumped sharply at $4,000, indicating a significant price milestone that, if broken, could have a domino effect. With so many traders betting against $ETH's bullish trend, the sheer volume of possible liquidations suggests increased market leverage. These liquidations may serve as fuel if Ethereum keeps rising, causing the price to soar above $4,000.
There is a noticeable upward trend on the Ethereum daily chart. $ETH has shown increasing bullish sentiment by establishing strong support levels close to $3,300 and $3,500, after breaking above $3,200. The positive momentum is confirmed by key moving averages, such as the 50, 100 and 200 EMAs, all of which are pointing upward. Early November saw a rally following the breakout from a consolidation phase, and the current price of $3,565 is still just below testing resistance at $3,800.
Investors should keep an eye on two important levels. The first short-term price movement may be determined by the $3,800 resistance. If Ethereum breaks out above this level, it may test $4,000, where significant short liquidations could support the rally. A crucial support level on the downside is $3,300.
A violation here could indicate that a correction is about to start. Ethereum's rise to $4,000 is accompanied by rising volatility. There may be a substantial squeeze if the price rises above the $4,000 mark, which might push $ETH higher. The market's response to these liquidation levels, however, may cause significant price swings in either direction, so staying cautious is the key.