Ethereum Price Analysis: ETH/USD vulnerable to massive longs liquidations

Rumors about the upcoming launch of the long-awaited Ethereum update caused a strong growth of ETH long positions. The trend has gone parabolic and reached unsustainable levels. Since February, the number of ETH longs on Bitfinex increased by 150% despite the major cryptocurrency sell-off in March.

Considering that Vitalik Buterin denied the allegations that Ethereum 2.0 would be launched by the end of July, this is a potentially dangerous situation that way result in a sharp sell-off once the market starts unwinding those longs.

ETH/USD: technical picture

At the time of writing. ETH/USD is hovering around $200.00 as the upside momentum on the cryptocurrency market is gaining traction. The second-largest digital asset with the current market value of $21 billion and an average daily trading volume of $17.2 billion has gained over 4% in the recent 24 hours. A sustainable recovery above the critical $200.00. A sustainable $200.00 will improve the technical picture and bring the next resistance of $212.70 back into focus. This barrier is reinforced by the broken upside trendline from March 13 low. Once it is out of the way, the upside is likely to gain traction, however, considering the downward-looking RSI on a daily chart, a strong growth momentum may be limited.

On the downside, if the price slides back below $200.00, the sell-off may be extended towards $193.50. This barrier is created by weekly SMA50 and followed by daily SMA100 at $191.50.

ETH/USD daily chart