Ethereum Caught in Liquidation Squeeze as Futures Positioning Reaches Dangerous Levels

Ethereum’s technical setup is flashing mixed signals as traders grapple with elevated futures open interest amid stalling price momentum. With ETH currently trading at $3.21K—down 3.85% over the past 24 hours—the cryptocurrency remains trapped between multiple resistance zones and mounting liquidation risks.

Price Action: Rejection at Key Resistance

The latest market data shows Ethereum oscillating within a tight 24-hour range of $3.18K to $3.37K, reflecting indecision among market participants. Despite briefly piercing above a descending trendline, the asset faced immediate selling pressure and retreated below both its 100-day and 200-day moving averages. This rejection from the same resistance zone that capped gains in early November signals persistent selling interest at higher levels.

On shorter timeframes, technical analysts have identified a bullish orderblock—a supply zone formed by prior buying activity—that now serves as a critical support reference. This orderblock aligns closely with the recently broken trendline, creating a defined zone where traders should monitor for either a meaningful bounce or a breakdown leading to further losses.

Momentum Fading, Risk Rising

The Relative Strength Index has retreated from overbought territory, suggesting momentum is cooling despite the modest recovery in prices. While previous resistance levels have transitioned into minor support zones, price action has lacked the follow-through needed to inspire confidence in a sustained uptrend. This disconnect between technical indicators and price movement often precedes volatile swings in both directions.

What’s particularly concerning for market participants is the divergence between futures activity and spot market strength. Open interest in Ethereum futures contracts remains elevated despite the lackluster price appreciation, creating a structural imbalance. Historical patterns show that when open interest climbs faster than price moves, it typically indicates aggressive speculative leverage entering the market—leverage that must unwind when liquidations cascade through the order books.

The Liquidation Trap

The current market structure presents a textbook setup for liquidation events. With positioning heavily skewed and orderblock support levels well-defined, any sharp move in either direction could trigger a cascade of forced liquidations. Traders holding leveraged long positions above resistance face cascading sell-offs if support breaks, while those betting on a bounce are vulnerable to a surprise rally that liquidates short positions.

Market participants should closely monitor whether Ethereum can hold the bullish orderblock support or if deteriorating technicals will force it lower. The next significant move will likely depend on whether spot market demand emerges to validate the elevated futures positioning, or whether speculative leverage must be flushed from the system first.