01.02.2025 14:20
As Ethereum faces a critical period at the resistance level of $3,400, the liquidation of $1 billion in short positions is anticipated. Possible participation from Elon Musk and the Trump family could accelerate the process of institutional adoption. The record-high options trading volumes reached in the last month are signaling a recovery in the market.
The second largest player in the cryptocurrency market, Ethereum, is facing a historic test at the critical $3,400 resistance level. The liquidation of approximately $1 billion in leveraged short positions will play a decisive role in surpassing this level. The state institution DOGE, led by Elon Musk, and the potential involvement of the Trump family are opening the doors to a new era in Ethereum's institutional adoption.
Ethereum Continues to Progress Towards the Peak
Ethereum, one of the leading assets in the cryptocurrency market, is currently going through a critical juncture. For the $3,400 resistance level, closely monitored by analysts, to be surpassed, approximately $1 billion worth of leveraged short positions need to be liquidated.
Ethereum's value is undergoing a significant test following the downward trend experienced in the last months of the previous year. The cryptocurrency, which fell below the psychologically significant $4,000 level on December 16, 2024, has since lost over 20% of its value, dropping to around $3,260.
Aurelie Barthere, the chief research analyst at Nansen, emphasizes that fundamental Blockchain activities need to be increased for Ethereum to regain its former strength. Barthere points out that other layer one Blockchain applications are approaching Ethereum in terms of diversity and use cases.
Industry experts highlight the importance of Ethereum strengthening public and private sector collaborations, especially considering the development of the regulatory framework in the U.S. The work being carried out by the Department of Government Efficiency (DOGE) under Elon Musk's leadership on Blockchain-based spending tracking creates significant potential in this area.
Joseph Lubin, the founder of Consensys and one of the co-founders of Ethereum, states that the roles the Trump family could take on in Ethereum-based projects could contribute to the platform's widespread adoption.
According to a report recently published by Bybit and Block Scholes, the trading volume of Ether options has reached record levels in the past month. However, experts warn that the rising options trading volume may not directly reflect in price increases.
Cryptocurrency analyst Cas Abbé stated in a post on the social media platform X on February 1 that Ethereum needs to surpass the $3,400 level to enter a rising trend. According to CoinGlass data, if this level is surpassed, the liquidation of $1.09 billion worth of leveraged short positions is expected.
Market observers suggest that the corporate purchases in the World Liberty Financial protocol, supported by the Trump family, could serve as a positive catalyst for Ethereum in February.