Ethereum Breaks $2,600, Short Positions 'Trapped'...$216 Million Liquidated

▲ Ethereum (ETH) ©Go Da-sol

Despite persistent inflation and concerns about US interest rate hikes, Ethereum (ETH) briefly broke above $2,600, reaching its highest level since January. Amid an unexpected rebound, approximately $216 million in short positions were liquidated, and technically, the recovery of $2,626 has emerged as a watershed for further gains.

According to investment media outlet FXStreet on September 12 (local time), ETH surpassed $2,600 during Friday's trading session before retreating to the $2,500 range, trading around $2,510 at the time of writing. According to Coinglass, approximately $216 million worth of Ethereum short positions were liquidated in the last 24 hours, with a single liquidation of about $20.3 million occurring on Hyperliquid. As a result of the large-scale liquidations, open interest decreased by 1.5 million ETH in one day, falling to 12.5 million ETH.

The surge came after the release of the US August Consumer Price Index (CPI). The CPI rose 0.4% month-over-month and 3.4% year-over-year, meeting market expectations. However, the core CPI, excluding food and energy, increased by 0.3% month-over-month, exceeding the forecast of 0.2%. This, along with the previously announced August Producer Price Index (PPI), strengthened expectations that the US Federal Reserve (Fed) would raise interest rates at next week's Federal Open Market Committee (FOMC) meeting. Decentralized prediction market Polymarket reflected an 81% probability of a 0.25 percentage point hike.

Nevertheless, ETH showed a different trend than it did during the PPI announcement. Immediately after the PPI release, it fell to $2,400, and funding rates plummeted into negative territory, but buying pressure defended the $2,400 level. After the CPI announcement, it temporarily broke above $2,600, putting pressure on investors who had bet on a decline. In August, over $1 billion in short positions were also liquidated within a day after the US Treasury's bond buyback announcement.

Technically, the bullish advantage is maintained. ETH is trading above its 20-day, 50-day, 100-day, and 200-day Exponential Moving Averages (EMA) on a daily basis. The Relative Strength Index (RSI) is around 64, indicating that buying pressure is dominant but not yet excessively overheated. ETH briefly surpassed the $2,626 resistance level before quickly falling back below $2,544. Analysis suggests that if it successfully closes above these two price levels on a daily chart, it could test the next resistance level at $2,786.

Conversely, in case of a decline, $2,431 is presented as the primary support level. Immediately below that, $2,417, where the 20-day EMA is located, holds strong. If the correction deepens, the 50-day EMA at $2,235, the 200-day EMA at $2,182, and the horizontal support level at $2,172 are expected to become key defensive lines in sequence.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*