Ethereum (ETH) has recently demonstrated significant upward momentum, with its price climbing over 3% on May 18th to reach $2,550. This surge resulted in the liquidation of more than $22 million in ETH short positions, signaling a shift in market sentiment. Analysts are now pointing to a bullish flag pattern on the charts, suggesting a potential rally toward $3,700. Some experts even speculate that under optimal conditions, Ethereum could target the $5,000 mark in the coming weeks.
Ethereum Price Movement and Market Liquidation
On May 18th, ETH experienced a notable rebound, rising over 4.5% from the previous day’s low of $2,440 to hit an intraday high of $2,551. This recovery reinforced trader optimism, with many anticipating a breakthrough above the $3,000 resistance level in the near term.
The broader cryptocurrency market witnessed substantial liquidations during this period. Over the past 24 hours, more than $158 million in leveraged positions were liquidated across the market, with long positions accounting for $95 million of that total. For Ethereum specifically, short sellers faced $22.25 million in liquidations, including $7.5 million within just one hour. This indicates that the price movement caught many short-term bearish traders off guard.
Market data also reveals significant sell-side interest between the current price level and the $3,000 threshold, with cumulative sell orders exceeding $384 million. This suggests that while bullish momentum is building, Ethereum may encounter considerable resistance on its path upward.
Is the Ethereum Recovery Gaining Momentum?
Several market analysts interpret Ethereum’s recent pullback as a technical correction rather than a reversal. This retracement is seen as a necessary step to test key support levels before continuing its upward trajectory toward $3,000 and beyond.
One analyst highlighted that the weekly Stochastic RSI reading of 79 indicates that Ethereum still has "plenty of fuel in the tank" for further gains. This momentum oscillator suggests that the asset is not yet in overbought territory, leaving room for additional appreciation in the coming weeks.
Another expert suggested that Ethereum’s downside may be limited around the $2,400 level. According to this view, ETH could retest this support zone before initiating a fresh upward move targeting the $3,000 to $3,300 range.
A more conservative forecast came from a different analyst who proposed that Ethereum might experience a deeper correction to the $1,800 area before resuming its bull run. This perspective emphasizes that such a retest could create a high-probability entry point for bullish investors, potentially setting the stage for a significant rally toward $4,000 to $5,000.
Several fundamental factors could support Ethereum’s long-term growth, including expanding artificial intelligence applications, continued spot ETF inflows, and technical improvements expected from the upcoming Pectra upgrade.
Technical Analysis: Bull Flag Pattern Intact
From a technical standpoint, Ethereum’s price action remains constructive. On the four-hour chart, ETH continues to trade above a confirmed bull flag pattern—a typically bullish configuration that forms during consolidation periods following sharp upward moves.
This pattern was confirmed on May 13th when the price broke above the upper trendline at $2,550. Currently, Ethereum is retesting the flag’s upper boundary around $2,470, which serves as immediate support. A daily close above this level could signal a resumption of the upward trend, with a technical price target of $3,720—representing a potential 50% gain from current levels.
However, the Relative Strength Index (RSI) has declined from 60 to 42 over the past 24 hours, indicating that if profit-taking intensifies, the current correction could extend further. A daily close below the $2,470 support level might lead to a test of the $2,400 zone or even the lower boundary of the flag pattern around $2,300.
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Frequently Asked Questions
What caused Ethereum’s recent price increase?
Ethereum’s price rise on May 18th was driven by a combination of technical factors and market sentiment. The liquidation of over $22 million in short positions created buying pressure, while the confirmation of a bull flag pattern provided technical optimism.
How high can Ethereum price go in the near term?
Based on current technical patterns, analysts suggest a near-term target of $3,700 if the bull flag formation plays out completely. Some experts believe that under optimal conditions, ETH could reach $5,000 in the coming months.
What are the key support levels for Ethereum?
Immediate support lies around $2,470, corresponding to the upper boundary of the bull flag pattern. Below this, $2,400 and $2,300 serve as additional important support zones that could attract buyer interest if tested.
What factors could drive Ethereum’s price higher?
Key catalysts include increased adoption in AI applications, continued institutional investment through spot ETFs, successful implementation of the Pectra upgrade, and overall positive cryptocurrency market sentiment.
Is Ethereum’s current momentum sustainable?
While technical indicators suggest continued upward potential, traders should monitor key support levels and market sentiment. The weekly Stochastic RSI reading indicates there may still be room for growth before reaching overbought conditions.
What risks should investors consider?
Potential risks include increased regulatory scrutiny, broader cryptocurrency market corrections, unexpected technical issues with network upgrades, and changes in institutional investment patterns that could affect price momentum.