Ethereum is currently in a high-risk "liquidation iron gate" range, fluctuating between $3200 and $3400. Any directional breakout from this range could trigger a volatile market, driven primarily by the intense accumulation of high-leverage contracts.
According to the latest data from Coinglass, an upward breakout and a downward breakdown will trigger vastly different liquidation storms. If the price of Ethereum successfully breaks above $3400, it will trigger the forced liquidation of short positions amounting to up to $515 million. This indicates that a significant number of short positions are concentrated in the $3350 to $3450 range, and once the price breaks upward, it is likely to trigger a short squeeze, rapidly pushing the price up towards $3450 or even above $3500.
Conversely, if the price breaks down below $3200, it will trigger a larger-scale long liquidation involving funds amounting to as much as $1.195 billion. Due to the accumulation of long positions in the $3200 to $3300 range, once the price loses the $3200 level, it will trigger a chain reaction of forced selling, leading to a rapid decline in price, potentially dropping quickly to around $3150 or even $3100.
This range is not a typical price fluctuation; it is a classic "liquidation acceleration zone". Considering the 8.5% increase in total contract positions across the network in the past 24 hours to $41.1 billion, Ethereum is currently in a region of extremely high leverage. Thus, once the price chooses a direction, the market is likely to unfold in the form of a rapid breakout or crash, rather than slow fluctuations.
From a trading perspective, within the $3200 to $3400 range, it is advisable to avoid opening high-leverage directional positions due to significant liquidation risks on both sides. The true directional breakout will depend on which side's positions are liquidated on a large scale first. Whether upward or downward, since forced liquidations are executed automatically by the system, once triggered, they will create a continuous mechanical transaction, leading to substantial price volatility in a very short time.
In summary, Ethereum is currently trapped in a dangerous liquidation range. A breakout above $3400 will trigger approximately $500 million in short positions, while a breakdown below $3200 will trigger nearly $1.2 billion in long liquidations. Once the market makes a directional choice, rapid and intense large-scale movements are expected.
