Ethereum’s Liquidity Reset Signals Market Bottom
Ethereum has shown signs of bottoming after a recent liquidity reset. ETH traded near $2,950 before rebounding above $3,000, though it is still down about 5% over 24 hours and 22% monthly. Analysts at Altcoin Vector note that past liquidity resets often precede multi-week bottoming phases and potential recovery. The next upward leg depends on renewed liquidity inflows. Delays in liquidity rebuilding could extend consolidation and increase downside risk. Crypto analyst Ted Pillows warns of a possible test of the $2,800–$2,900 range. Daan Crypto Trades highlights that ETH is holding the 0.618 Fibonacci retracement zone but needs a break above $3,650 to improve its outlook. Meanwhile, subdued New Depositors metrics point to weak retail participation. Historical parallels include summer 2020 and early 2024 when similar patterns preceded significant rallies. A successful recovery in liquidity and investor participation could set the stage for Ethereum’s move toward $6,000–$7,000.
Neutral
Ethereum’s current price action and liquidity dynamics suggest a bottoming process rather than a definitive bullish or bearish trend. The report emphasizes that liquidity resets historically lead to multi-week stabilization phases, offering potential for an upward move once inflows resume. However, warnings from analysts about further drops to the $2,800–$2,900 range, coupled with muted retail participation, underline ongoing downside risks. This balanced outlook, with distinct bullish triggers (liquidity return, retracement breakout) and bearish catalysts (delayed flows, weak depositor activity), supports a neutral classification. Short-term trading may see range-bound volatility, while long-term prospects hinge on renewed liquidity and investor engagement.