ETH faces a $1.5 billion dual-sided liquidation trap, with $3530 becoming the dividing line between bulls and bears

Ethereum is currently at a delicate price point. According to the latest news, if ETH breaks through $3,530, the cumulative short liquidation strength on mainstream CEXs will reach $1.542 billion; conversely, if it falls below $3,204, the cumulative long liquidation strength on mainstream CEXs will also reach $1.539 billion. The current ETH price is $3,372.20, positioned between these two critical liquidation levels, facing significant liquidity risks in both directions.

The True Meaning of Liquidation Strength

First, it’s important to understand what this data represents. Liquidation strength does not indicate how many contracts will be liquidated, but rather the impact caused by liquidity waves when the price reaches certain levels. Higher liquidation bars mean that reaching that level could trigger stronger chain reactions.

From the data, a liquidation strength of around $1.5 billion is quite high among mainstream cryptocurrencies. This implies that a break of either of these key levels could trigger a large-scale wave of liquidations.

Current Price Risk Assessment

The dual-sided liquidation strength is nearly symmetrical, both in the range of $15.39-$15.42 billion, which in itself indicates the market’s level of divergence. Both bulls and bears have deployed large positions within this price range.

Market Sentiment Is Turning Bearish

According to the latest information, the market is attempting a “top-fishing short.” Funding rates on mainstream CEXs and DEXs have turned negative, and altcoins are also showing negative rates, indicating traders are generally bearish.

However, whether this bearish sentiment can persist is uncertain. Data shows that in the past 24 hours, CEXs experienced a net outflow of 88,300 ETH, with Binance outflowing 52,200 ETH and Kraken 36,500 ETH. Large withdrawals typically reflect two attitudes: one, bearish traders withdrawing to buy back at lower levels; two, bullish traders withdrawing to hold long-term. This divergence indicates that market participants’ attitudes are not uniform.

On-Chain Signals

Contradiction Between Withdrawals and Bearish Sentiment

Although funding rates are negative, the scale and direction of withdrawals are interesting. OKX, in particular, saw inflows of 18,400 ETH, which may suggest institutional players are accumulating short positions after high-level positioning, choosing to build their positions on platforms like OKX.

Increasing Liquidation Frequency

Recent days have seen rising liquidation data. In the past 24 hours, total liquidations reached $232 million, with ETH long positions liquidated for $30.225 million and shorts for $16.6087 million. This indicates increasing market volatility, with both sides getting liquidated.

What to Watch Next

From the current price to $3,530, only about $158 of upward movement is needed. If Bitcoin continues to rally (currently approaching $97,000), ETH is highly likely to follow. Breaking through $3,530 could trigger $1.542 billion in short liquidations, generating strong stop-loss buy orders and potentially pushing prices higher.

Conversely, if market sentiment worsens, the long liquidation line at $3,204 is within reach. That could trigger $1.539 billion in long liquidations, creating a downward liquidity wave.

Summary

ETH is at a high-risk equilibrium point. The dual-sided liquidation strength is nearly equal, with the price about 5% away from both key levels. Any breakout in either direction could cause significant liquidity shocks. While bearish sentiment is rising, on-chain withdrawals and inflows on OKX suggest not everyone is bearish.

In this scenario, key factors to watch are whether Bitcoin can hold above $97,000 and whether funding rates turn further negative. If BTC continues upward, ETH is likely to test the upward liquidation line first; if it pulls back, the downward liquidation line becomes the risk zone. Whichever way, upcoming volatility could be quite intense.