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Ethereum has flipped bearish following the market’s reaction to the Federal Reserve (Fed) meeting, but its price remains firm above the $2,100 level. Given the bearish conditions, the market dynamics of ETH are starting to shift as key metrics signal a possible liquidity trap ahead at current levels.

An Ethereum Liquidity Trap Signal Emerges

After recent price action, an on-chain indicator is triggering fresh concerns around Ethereum and its market dynamics. These kinds of signals are typically seen during volatile periods and could play a crucial role in shaping the altcoins’ next price trajectory in the short term.

Combining signals from multiple metrics, Boris, a crypto trader and on-chain analyst, has outlined the potential formations of a liquidity trap for ETH. Even though price activity may seem stable on the surface, underlying data indicate that liquidity is being concentrated in a way that could surprise traders.

As ETH’s price climbed toward the $2,400 level, the Whale Vs Retail Delta continued to move into negative territory. This trend underscores a key divergence in activity between large holders and smaller investors in the market. Simply put, large holders or whales are reducing their relative activity or exposure, while small traders are becoming more active in the market.

Currently, whale investors are closing their long positions in Ethereum and opening more short positions. Meanwhile, retail holders are doing the opposite as they aggressively open long positions. When institutional players retreat while retail engagement increases, this imbalance frequently indicates a shifting mood under the surface. A trend of this kind is considered a classic liquidity illusion.

Boris highlighted that buying pressure saw robust strength for a period, but those buys were absorbed by sell-side liquidity. As a result, the market has entered a cooling phase. Historically, the current market setup hints at further downside pressure.

Adding to the market trend is the ETH Liquidation Levels metric. Data shows a significant long buildup over the past month, with key liquidity targets at $1,850 and below. While the price is moving up, the market is clearly demonstrating weakening strength underneath.

ETH Closes Recent CME Gap

Ethereum’s recent price action was met with a CME Gap. However, CW, a market expert and investor, reported that the leading action has filled the gap, which was located at $2,117. As the market tries to correct inefficiencies, these gaps, which are frequently created during times of intense price movement, may serve as magnets for subsequent price action.

After closing the gap, a buy wall has been formed around $2,100, and this level aligns with the Fibonacci level of 0.382. If a rebound occurs after reaching the $2,100 level, the next target is around $2,686, a price that corresponds to the 0.382 fib level. Meanwhile, if ETH rises to this level, another CME gap ahead will be filled.

Featured image from Peakpx, chart from Tradingview.com

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Following a disappointing performance in February, the Ethereum price has seen some semblance of relief over the past two weeks. With the steadying market condition, the “king of altcoins” has managed to hold its own around the psychological $2,000 level.

This, expectedly, has been enough to rouse hopes in silent investors on the Ether token’s future; however, a market analyst has revealed reasons to believe that Ethereum buyers might want to sit on their hands — at least in the meantime.

Multiple Indicators Align To Reflect High Market Stress

In a recent post on the social media platform X, on-chain analyst Boris highlighted data from three metrics, showing that the Ethereum market is starting to see a surge in pressure. According to the analyst, if the present conditions persist, a capitulation phase might be on the horizon for the second-largest cryptocurrency.

The market pundit started their analysis with the Net Unrealized Profit/Loss (NUPL) metric, which measures the overall profit or loss of investors by comparing the current market value of ETH to the price at which coins last moved on-chain. Boris shared in his post that the NUPL currently sits on a negative level, suggesting that Ethereum’s investors may be holding through unrealized losses.

Ethereum may be approaching a major capitulation zone

Several key on-chain signals are starting to align:

• NUPL: Negative → Investors are holding unrealized losses
• Price: Below Realized Price (~$2.2K) → Market still under pressure
• Profit Days: The 1.34K-day profit… pic.twitter.com/rHNw1Pn0i8

— Boris. (@Fundingvest) March 12, 2026

Another major metric cited was the Realized Price metric, which represents the average price at which all coins in circulation were last moved on-chain. Boris pointed out in his tweet that the altcoin is currently trading beneath its realized price of $2,200. 

When the market falls below this level, it indicates that the average Ethereum investor is holding through losses. Hence, this on-chain signal translates as a level of pressure being felt by Ethereum’s investors, as the market price continues to fluctuate below the realized price. 

Source: @Fundingvest on X

Furthermore, Boris mentioned the Number of Days Spent at a Profit metric in his analysis, saying that the Ethereum network recently ended an impressive 1,340-day streak, during which the majority of circulating Ether tokens remained profitable. 

The analyst explained that this is often a signal that a market cycle has ended — a conjecture that is consistent with historical events and tends to appear close to the bottoms of bear markets.

Despite the present conditions, Boris warned that NUPL still has to move deeper towards the capitulation zone between –0.5 and –1 for a bottom to be formed. If the Ethereum price were to experience another sell-off round, the metric could enter the capitulation zone, where several investors might be forced to forfeit their positions — an event that would most likely be exploited by long-term traders (the diamond hands).

Ethereum Price At A Glance

As of this writing, the price of Ethereum stands at around about $2,092, reflecting an over 1% drop since the past day. 

The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView

Featured image from DALL-E, chart from TradingView

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.