Ethereum Price Analysis: Parabolic Indicator Moves Above $2,722? But Can $2,300 Support Hold?

Highlights

Ethereum price dips below $2,500 as short-term indicators weaken while long-term momentum remains strong.
Derivative volumes down 34%, showing cautious sentiment despite slight uptick in open interest and large leveraged long positions.
Top traders are 2.7x long, highlighting bullish conviction but also increasing downside risk if sentiment shifts suddenly.

Ethereum price broke and consolidated below the $2,500 level on Tuesday, May 20, aligning with the tepid momentum in the broader crypto market. Key technical indicators shows that ETH price could be at risk of massive liquidations if the $2,300 support caves.

Ethereum (ETH) Halts Below $2,500 as Market Awaits Further Signals

Ethereum (ETH) price stagnated below $2,500 on Tuesday, down 1.8% from its recent weekly high. According to CoinGecko, ETH briefly touched $2,588 intraday before retreating to $2,482 at press time.

This cooling mirrors the broader altcoin sector, where only Solana (SOL) and Tron (TRX) posted considerable gains, up 1.7% and 2.3%, respectively. With the Trump-China trade deal facing new hurdles and institutional sentiment uncertain, many investors are awaiting the U.S. Fed’s June rate decision and the SEC’s pending verdict on altcoin ETF applications slated for June 16.

Ethereum Technical Analysis: Parabolic Moves Above $2,700, But $2,300 Buy-Wall Looms Large

On the daily chart, Ethereum’s Parabolic SAR now rests at $2,722, well above current price action. This signals that with ETH now trading below $2,500 and printing consecutive lower highs, buyers appear cautious.

The Relative Confidence Index (RCI) Ribbon shows short-term bearish divergence: the fast line has slipped to -36.97, while longer-term values remain elevated (87.72 and 74.41). This divergence suggests a potential shift in short-term sentiment, even as medium-term trends hold bullish.

Ethereum technical price analysis, May 20, 2025 | TradingView (Binance)

The $2,339 mark is acting as a psychological and structural support floor—highlighted by previous consolidation zones and high-volume node activity. If ETH price breaks below this line, bears may target $2,100 next.

However, so long as bulls defend $2,300, the broader uptrend from May remains intact, especially with ETF catalysts and macro signals still developing.

Ethereum Derivatives Markets Signal Cautious Optimism, But Longs Face Liquidation Risks

Derivatives data paints a mixed outlook for ETH. While open interest climbed 1.72% to $30.94 billion, trading volume dropped sharply by 34.79% to $89 billion—signaling cooling conviction among active traders. Options volume also declined 32.62%, despite open interest remaining steady near $7.69 billion.

The long/short ratio on Binance is 0.9849, suggesting balanced sentiment, but deeper breakdowns show top traders heavily skewed long, with a 2.77x account-based long/short ratio and a 2.68x position-based ratio.

Ethereum (ETH) Derivative Data Analysis | May 20, 2025 | Coinglass

Liquidation data reflects rising risk. In the past 24 hours, over $64.37 million in ETH derivatives were wiped out—$35.46 million from longs and $28.90 million from shorts. The most recent 1-hour window saw $1.54 million rekt, with long positions contributing 28% of that.

Despite bullish leverage from whales, the declining volumes and increasing rekt totals, especially $22.35 million in long liquidations over the past 12 hours, signal fragility.

If ETH breaches $2,300, cascading liquidations could accelerate downside pressure potentially driving prices towards the $2,100 level.

Frequently Asked Questions (FAQs)

1. Will Ethereum fall below $2,300 this week?

Ethereum is trading near critical support. If $2,300 breaks, increased liquidations could push ETH toward $2,100 in the short term.

2. Why is Ethereum's trading volume down despite stable open interest?

Lower trading volume suggests reduced participation or caution, even as some whales continue to hold long positions with high leverage.

3. What does a long/short ratio above 2.5 mean for Ethereum?

It shows top traders are heavily long. While this can support rallies, it also increases risk of cascading liquidations on downturns.

TAGS
Ethereum

Trending
Price Analysis

Best Crypto Presales To Invest In September 2025 – Top Upcoming Presale Tokens

Best Crypto AI Trading Bots In 2025

Top Meme Coins To Buy In September 2025

Coingape Staff

CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.

Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.