Ethereum’s Rise and Investor Profit Threshold
Ethereum’s (ETH) price has captured the spotlight by gaining nearly 40% in the past week, thanks to the overall upward trajectory in the cryptocurrency market. The recent surge propels ETH beyond the $2,500 mark, bringing approximately 6.61 million investors to the brink of profitability. The liquidation of short positions has put bearish investors in a tight spot, and a further 3% price increase may imperil an additional $800 million in short positions. Analysts caution that this movement could trigger periods of sudden volatility.
In the first week of May, Ethereum 
$2,550 demonstrated a rapid climb from $1,812 to $2,584. This ascent was marked by three consecutive bullish candles, completing the classic “three white soldiers” formation, underscoring the buyers’ dominance in the market. The “U” shaped rounded bottom formation in the chart is viewed as a sign of trend reversal.
According to IntoTheBlock data, around 6.61 million investors bought Ethereum at an average price of $2,462. With prices surpassing $2,557, these positions will enter a profitable zone, potentially forming a robust support area with 67 million ETH benefiting. Consequently, investors are focusing on maintaining this critical barrier while monitoring potential surges.
Increased Volatility and Leveraged Trading Risks
Coinglass’s liquidation map indicates that a mere 3% increase in price might lead to the forced liquidation of $786 million in short positions. Such an event could rapidly instigate a new wave of buying, pushing Ethereum even higher.
Conversely, if ETH’s price drops 3% to $2,438, it could endanger $715 million in long positions with liquidity risks. This scenario warns of potential abrupt price falls, making caution paramount in leveraged trading. The RSI indicator, pointing toward overbought conditions, further strengthens the likelihood of short-term corrections.
Investors are closely monitoring $3,000 as a psychological resistance level and $4,570 as a potential target. The movement above the 200-day exponential moving average confirms the prevailing upward trend. However, with significant leveraged positions and rising volatility, effective risk management is crucial.
