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ETH’s flash crash to $3,050 cleared out $1.3 billion in leveraged long positions, creating a market imbalance with $7 billion in short liquidity. Will a short squeeze send ETH above $4,000?
💡 DMK Insight
ETH’s recent plunge to $3,050 has shaken out a massive $1.3 billion in long positions, and here’s why that matters: This liquidation has left a significant short liquidity pool of $7 billion, setting the stage for a potential short squeeze. If ETH can reclaim the $3,400 level, it could trigger a rally towards $4,000 as shorts scramble to cover. Traders should watch for volume spikes around these levels, as they could indicate whether the momentum is shifting. But don’t ignore the risks—if ETH fails to hold above $3,200, we might see further downside pressure. Keep an eye on broader market sentiment and correlated assets like BTC, which could influence ETH’s recovery trajectory. The next 24-48 hours will be crucial for determining whether this is a buying opportunity or a trap.
📮 Takeaway
Watch for ETH to reclaim $3,400 for a potential rally towards $4,000; failure to hold $3,200 could signal further downside.
