Three Things to Know
A wave of ETH liquidations hit short sellers hardest when the post-election sell-off reversed.
Ether now sits right on its 50-day average, with momentum quietly turning toward buyers.
The real test lies overhead, where sellers turned the price back once before.
Ether short sellers took heavy losses this week as crypto rebounded from a post-election sell-off. Liquidation data showed bearish bets made up most of the positions wiped out in a single day.
That forced buying gave ETH a sharp bounce after a weak month. Traders now want to know whether spot buyers step in once the squeeze runs out, or the price drifts back toward its range lows.
Forced Buying Fuels Ether’s Rebound After the Midterm Scare
Crypto markets sold off after the midterm elections handed Democrats control of both houses of Congress. Traders worried about the direction of federal crypto rules. Crypto and stock futures soon rebounded, and bitcoin recovered from a six-week low.
Ether led the bounce. It rose about 6.9% in a day and traded near $2,419 on Nov 4. Bitcoin gained about 4.7% over the same stretch.
Forced buying drove much of that move. CoinGlass data showed about $238 million of ETH positions liquidated in a single day. Shorts made up about 55.5% of the total, so bearish traders bore the brunt.
The daily win hides a weaker record. Ether fell about 16.6% over the past month, while bitcoin lost about 10.4%. Year to date, ETH is down about 23.8% against bitcoin’s 12.1% drop. It still sits about 51.2% below its $4,946 peak.
A lasting rally needs spot buyers to replace the squeeze. Retail curiosity is rising. Views of Ethereum’s Wikipedia page rose about 81% last week.
Ether Balances Exactly on Its 50-Day Average
Ethereum (ETH) daily price with the nearest support (green) and resistance (red). Source: TradingView
Ether now trades near $2,410, flat on the day. That puts it exactly on its 50-day moving average, which tracks the average closing price over the last 50 sessions. The squeeze lifted ETH back to that line and stalled.
A price sitting on its 50-day average tells traders the market has no clear edge in the short run. If ETH closes firmly above it, the average can start working as a floor. If it slips back under, the same line turns into a ceiling that sellers can lean on.
The longer view looks steadier. ETH holds above its 200-day average, which sits near $2,320. Staying above that slower line keeps the broader uptrend structure intact.
Shorter and longer windows diverge. Ether gained about 2% this week, a modest recovery. Over 30 days it is still down about 11%.
On the daily chart, that leaves ETH recovering inside a downtrend range. It has climbed off the lows without escaping the band that has capped it for weeks. Bulls need follow-through above the moving average before the bounce counts as more than a relief move.
Buyers Regain the Upper Hand Without Overheating
RSI, a 0 to 100 gauge of momentum, sits near 53 on the daily chart. That reading is neutral. The squeeze lifted ETH without pushing it into overheated territory, so buyers still have room to push.
Momentum is also turning in their favor. The MACD, which compares a short-term and a longer-term price average, has crossed above its signal line. That crossover suggests the downward pressure from recent weeks is easing and upside momentum is building.
Trend strength tells a similar story. The trend gauge points to a real trend, and buyers are the side leading it.
Squeeze rallies carry a catch, though. Liquidated shorts buy because they must, and that forced demand ends once the positions are closed. Without fresh spot buying behind it, this momentum can fade as quickly as it arrived.
Where the Squeeze Must Prove Itself
The first test sits right below. ETH’s nearest support lines up with its 200-day average, so two signals meet at one level. Holding there keeps the squeeze gains intact. A daily close beneath it would hand back much of the post-election bounce.
Below that, support waits near $2,230, at the bottom of the recent trading range where selling stopped. A break below it would suggest forced buying drove most of the rally and real demand never showed up.
Overhead, resistance sits near $2,560. That level sits just above the $2,524 high set in the week starting Oct. 25, a peak ETH never revisited. Sellers stepped in there once, and they may defend the zone again.
A clean move through that band would mean more than short covering. It would show spot buyers willing to pay higher prices after the liquidations ran their course. The next ceiling then comes into view around $2,650.
Spot Demand or a Fade Back to the Range Floor
Bullish: A daily close above the resistance zone would signal real demand and open the way toward the next ceiling. The setup fails if ETH slips back under its 50-day average.
Bearish: A close below the 200-day average would put the range floor back in play. That view fails if buyers reclaim the 50-day line, which would show the squeeze gains still have support.
Squeeze Fuel Is Not Enough on Its Own
Breaking higher will take steady spot demand, because liquidated shorts cannot keep lifting the price.
Policy headlines from the new Congress could also jolt prices again, and they could push in either direction.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
