ETH Bollinger Band Breakout and $1.7B Liquidation — What's the Direction of the Wavering Trend?

Ethereum is experiencing a short-term correction as it faces sudden volatility triggered by mass forced liquidations. However, the market's overall strength hasn't been exhausted, and the technical foundation for further upside remains robust. After a strong breakout above the upper Bollinger Band—a key indicator of recent price volatility—Ethereum is undergoing a temporary breather following the $1.7 billion sell-off that shook the broader crypto market.

Although the wave of selling caused a short-term dip, the broader technical landscape suggests that the upward momentum remains in control. This decline is less a complete reversal of the trend and more a digestion of selling pressure, as overheated positions in the futures market—built on speculative bets—are being flushed out.

The key now is whether support levels will hold as buyers step in to defend against further drops. In this analysis, we examine the resilience of the Ethereum market following the mass liquidation and identify the critical price levels that must be maintained to sustain the upward trend.

Daily Uptrend Remains Intact Despite Liquidation Shock

Ethereum has undergone a price correction due to the large-scale forced liquidations that recently rattled the entire market. However, looking at the technical flow on a daily basis, the core structure of the uptrend remains largely unshaken. Notably, the ADX (Average Directional Index), which measures trend strength, is hovering around 34, suggesting the current upward momentum has not fully lost steam. Signs of buyers attempting to defend against sell pressure and lead the market are visible throughout the daily chart.

Despite the short-term price drop, buying sentiment does not appear to be easily broken. The Relative Strength Index (RSI), which measures market heat, remains at a high level of approximately 78, even after dipping slightly during the recent correction. While a high RSI often signals an overbought asset, it is more natural to interpret this as a sign of strong, continuous buying pressure in the context of a robust uptrend. In short, this drop is likely a temporary breather caused by the $1.7 billion cleanup of over-leveraged futures positions, rather than a trend reversal.

Looking at the balance of power within the market, buying energy still holds the upper hand despite the selling pressure. However, for the price to reclaim the previous upward trajectory without further correction, a stabilization phase to digest short-term supply is necessary. If buyers can firmly hold the current price range, the shock could be quickly absorbed; conversely, if volume drops significantly and buyer interest wanes, we should keep in mind that the pace of the uptrend could be slower than expected.

Key Support Levels and Variables for Trend Continuity

The first key to whether Ethereum can overcome this short-term correction and continue its rally is holding the 20-day moving average (the support line connecting the average price over the last 20 days). Despite the massive liquidation flood, the overall daily uptrend has not yet broken. If the price can stabilize and digest the selling pressure around this 20-day line, it can be viewed as a preparation phase for returning to an upward path after a temporary pause. Conversely, if it fails to hold this level and the decline continues, the short-term bullish scenario will lose its force.

We can gauge whether the trend's strength is still intact through the aforementioned technical flow. Although sudden massive liquidations have dampened short-term sentiment and created downward price pressure, the overall daily bullish energy has not completely dissipated. Generally, in a market maintaining a strong uptrend, buy orders tend to wait and step in at key support levels even if short-term overheating triggers a correction. Therefore, rather than being swayed by mere indicator overshoots, it is wiser to watch whether selling pressure dissipates at these core support levels.

The trend for investors to watch moving forward boils down to two paths. If the price finds stability above the 20-day line and volume recovers steadily, it will likely attempt another push toward the upper Bollinger Band, which acts as the ceiling for the price range. Conversely, if the daily close drops below the support line and sell pressure intensifies, the uptrend is invalidated, and preparations for further downside correction will be necessary. Ultimately, the price reaction and volume stability at the key support level will be the final deciding factor for Ethereum's path ahead.