ETH faces a dual liquidation trap: 1.438 billion in short positions vs. 1.217 billion in long positions. Where will the price go?

According to the latest news, if ETH breaks through $3,428, the cumulative short liquidation strength on major CEXs will reach $1.438 billion; conversely, if it falls below $3,104, the long liquidation strength will hit $1.217 billion. This indicates that Ethereum faces significant liquidity risks both above and below its current price level.

The True Meaning of Liquidation Intensity

First, it’s important to understand what “liquidation intensity” means. It doesn’t refer to how many contracts are pending liquidation, but rather reflects how strong the market reaction will be when the price reaches a certain level, due to liquidity waves. Higher liquidation bars indicate that once the price hits that level, the market response will be more intense.

According to explanations, liquidation intensity essentially measures the concentration of leverage in the market—when many traders set stop-loss or forced liquidation points close to each other, reaching these levels can trigger chain reactions of liquidations, creating liquidity shocks.

A Specific Comparison of Two-Way Risks

Why Is Liquidation Intensity Increasing?

Compared to data from January 6, when ETH was at around $3,300, the short liquidation intensity was only $809 million. In just one day, the liquidation intensity surged from $809 million to $1.438 billion, an increase of over 75%. What does this indicate?

Market leverage concentration is rising rapidly. More traders are holding leveraged positions in similar price ranges, meaning that while market opinions on price direction are narrowing, the scale of bets is expanding. Once triggered, the subsequent chain reactions will be more violent.

The Subtle Position of the Current Price

ETH is currently trading around $3,265, exactly between two high liquidation intensity points. This position is quite sensitive:

• Breaking above $3,428 requires a 5% increase, triggering $1.438 billion in short liquidations
• Falling below $3,104 requires a 5% decrease, triggering $1.217 billion in long liquidations
• Both sides are about 5% away, making the two-way risk relatively balanced

Recent performance shows ETH has gained 10.11% over the past 7 days and 1.19% in the last 24 hours, maintaining upward momentum. However, this high liquidation intensity means any breakout in either direction could trigger sharp volatility.

Deeper Market Implications

This symmetrical high liquidation intensity reflects two characteristics of the market:

First, both bulls and bears are increasing leverage. Not only are shorts placing large stop-loss orders above $3,428, but longs are also setting dense defenses below $3,104. This indicates differing expectations among market participants about future price movements.

Second, liquidity concentration is increasing. Compared to the previous liquidation intensity of $809 million, the current $1.438 billion suggests leverage positions are more concentrated. While this may seem manageable under normal conditions, rapid price movements can easily trigger domino-like liquidations.

What to Watch for Next

Based on this data, some key points are:

• $3,428 is a short-term critical resistance; breaking it could trigger a wave of short liquidations
• $3,104 is a short-term critical support; falling below it could trigger a wave of long liquidations
• The $324 range between these levels is relatively safe
• If the price oscillates within this range, liquidation intensity will gradually be absorbed

Summary

ETH is currently in an interesting situation: it’s not purely bullish nor purely bearish, but both sides are filled with potential triggers. The $1.438 billion in short liquidation strength and $1.217 billion in long liquidation strength suggest the market is preparing for a big move, though the direction remains uncertain.

In the short term, any fluctuations between $3,104 and $3,428 are relatively mild. But once the range is broken—upward or downward—liquidity waves could trigger intense reactions. For traders, it’s crucial to recognize these liquidation levels and adjust risk management strategies accordingly.