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ETH USD: Is the Ethereum Breakout a Bull Trap?

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The Ethereum price has rejected from the $2,160 resistance zone, leading to many analysts calling for a bull trap for ETH USD

The Ethereum price slammed into the critical $2,160 resistance level yesterday, and after attempting to reverse a historic six-month losing streak, ETH USD looks to have rejected and is now trading back under $2,100.

Price action is currently extremely volatile, with ETH falling -1.6% over the last 24 hours to trade near $2,080, leaving traders paralyzed between a potential breakout and a classic bull trap.

While bullish momentum is building on lower timeframes, many European trading desks are warning of a classic bull trap setup, a fakeout that lures buyers in before flushing the price to new lows.

With the asset sitting at a make-or-break pivot, this coming weekend could define the Ethereum trend for the remainder of Q1 2026.

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The Ethereum price has rejected from the $2,160 resistance zone, leading to many analysts calling for a bull trap for ETH USD
SOURCE: TradingView

Ethereum Price Analysis: What’s Next After $2,160 Rejection?

While the 12-hour timeframe is teasing a massive reversal pattern that has bulls salivating, Ethereum needs to hold above $2,000. A daily close above this level would confirm the inverse Head and Shoulders pattern, with the neckline sitting firmly at that crucial $2,160 level.

Adding to the bullish case is a clear divergence in the Relative Strength Index (RSI), which has been making higher lows while the price consolidated. This momentum shift suggests that sellers are finally becoming exhausted.

If buyers can defend the $2,000 zone and clear the $2,160 resistance level, the immediate path of least resistance flips to the upside, targeting the 200-day moving average.

However, the risk of a fakeout remains high. If ETH USD fails to clear this breakout and slips back below $2,000, the bullish structure would be invalidated.

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In that scenario, the price would likely retest the $1,900 support zone. Traders watching the crypto price prediction today are acutely aware that volume must sustain this move, as a breakout on low volume is a prime candidate for a reversal.

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On-Chain Data Shows Massive Accumulation for ETH USD: Is It Enough?

On-chain metrics reveal aggressive accumulation despite chart resistance. Data from Glassnode shows that long-term holders added 252,142 Ethereum to their holdings in February 2026.

This “averaging down” behavior indicates that investors see current prices as a buying opportunity, regardless of short-term volatility.

This accumulation trend coincides with updates on Ethereum’s long-term roadmap from Vitalik, boosting confidence among institutional investors.

The disparity between increasing holder balances and stagnant prices often signals a potential supply shock, assuming macro conditions don’t lead to liquidation.

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Currently, support levels are holding, with the realized price for short-term holders aligning with market prices, suggesting that the capitulation phase may soon end.

Analysts Warn: Is This a Bull Trap?

Despite some market optimism, analysts are highlighting significant structural risks on the weekly timeframe.

Benjamin Cowen points out that Ethereum is trading below its weekly “bull market support band,” and the 50-week and 200-week moving averages are near a death cross.

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This has raised concerns among seasoned traders that the current rally might be a “bull trap.” If resistance at $2,160 holds, analysts predict a potential drop to $1,320-$1,345, a level not seen since the last cycle’s early accumulation phases.

Additionally, a new Chinese AI, Kimi, forecasts volatile market conditions leading into 2026 before any sustained all-time highs can occur.

To counter this bearish outlook, bulls need a weekly close above $2,300 on ETH USD to regain structural support; without it, the macro trend remains bearish.

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Bitget’s Gracy Chen says $1t US stock wipeout is speeding up macro reset

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Bitget’s Gracy Chen says $1t US stock wipeout is speeding up macro reset

Bitget CEO Gracy Chen says a $1t single‑day US stock wipeout is accelerating a global macro risk reset, while lower leverage helps Bitcoin act more like a neutral portfolio allocation than a pure risk punt.

Summary

  • Over $1 trillion was wiped from US stocks in a single day as risk assets sold off.
  • Bitget CEO Gracy Chen says the slide has accelerated a global “reassessment of macro risks.”
  • Bitcoin’s smaller drawdown and lower leverage hint at growing status as a neutral allocation.

In the wake of a sharp US equity selloff that erased more than $1 trillion in market value in a single session, Bitget CEO Gracy Chen says the rout is forcing investors to reprice macro risk at a much faster clip while Bitcoin (BTC) is starting to behave more like a neutral, portfolio-level allocation than a pure risk-on punt. According to ChainCatcher, the CEO’s remarks are the latest on top of a broader drawdown that has already knocked trillions off US benchmarks since President Donald Trump’s second-term tariff agenda reignited inflation fears and hit tech-heavy names. As of Friday morning, Bitcoin was trading around $66,500, down roughly 4% on the day but still outpacing major stock indices on a relative basis.

Gracy Chen: $1t US stock selloff shows Bitcoin becoming neutral allocation

Chen argued that the current move is less about idiosyncratic crypto stress and more about global portfolios digesting a new regime of higher energy prices, stickier inflation, and geopolitical conflict spilling over into capital allocation decisions. “This round of adjustment reflects that global markets are reassessing macro risks at a faster pace,” she said, adding that as oil spikes again, “the impact of geopolitical changes is no longer limited to the energy market but is beginning to more directly affect global capital allocation.” The comment comes as strategists at Bloomberg and elsewhere flag how renewed tariff salvos and conflict risk have turned the post-2024 equity boom into what one Bloomberg analysis called a “$1 trillion wreckage,” even as Bitcoin’s institutional scaffolding has largely held.

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Despite warning that Bitcoin will “still maintain high volatility in the short term,” Chen highlighted that the asset’s behavior this week has been “relatively robust” compared with previous episodes when risk appetite collapsed. She pointed to a sharp reduction in derivatives leverage as a key reason: “The overall leverage in the crypto market has significantly decreased, thereby limiting the scale of forced liquidations that typically amplify downward pressure during market stress.” That fits with recent flows data showing Bitcoin spot ETFs have seen bouts of outflows but not the kind of capitulation that marked prior crashes, while Bitget’s own protection and risk systems have been tightened as volatility climbed.

For Chen, the resilience is sending a signal about how Bitcoin is being used. “In an increasingly fragmented macro environment, Bitcoin is starting to be viewed by some portfolios as a more neutral allocation choice,” she said. That echoes her earlier comments that recent drawdowns are “tightly linked to the macro cycle,” with investors rotating between crypto, equities, and gold as they navigate Trump’s tariff-led policy shock and rising odds of a US recession. According to a recent crypto.news story, US markets have wiped out $9.6 trillion in value since Trump’s second inauguration, even as Bitcoin has repeatedly bounced after single-day drops of 1%–5%, underlining its evolving role in a world where macro risk is now the dominant driver of asset prices.

In earlier coverage, crypto.news detailed how a previous wave of selling erased $1.1 trillion from digital assets in just 41 days as leverage cascades intensified the downside, a backdrop that makes today’s more orderly drawdown stand out. Another recent story examined how the same tariff and inflation shock that hit tech stocks has rippled through crypto, while a separate report tracked how Bitcoin’s price has stayed comparatively resilient even as US equity indices flirt with bear-market territory. For live market data on Bitcoin, readers can follow its price page on crypto.news, alongside dedicated pages for other major assets involved in these rotations, including Ethereum, XRP, Solana, and Dogecoin.

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California Governor Newsom Signs Prediction Market Insider Trading Order

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California, US Government, United States, Prediction Markets

California Governor Gavin Newsom signed an executive order on Friday, expanding rules to curb public servants and those close to them from benefiting from insider trading on prediction markets tied to political or economic events they can influence or are privy to.

The order prohibits “gubernatorial appointees,” public officials appointed to office by the governor of the state, from using “confidential or non-public information” gleaned from performing their duties to profit from related prediction markets.

Newsom’s executive order also extends the prohibition to include spouses, family members or former business partners of the appointed officials from using non-public information to profit. “Public service should not be a get-rich-quick scheme,” Newsom said. He added:

“At a time when Trump’s Washington is riddled with ethical failures and insider profiteering, California is drawing a bright line: If you serve the public as a political appointee, you serve the public — period. We’re not going to tolerate this kind of corruption in California.”

California, US Government, United States, Prediction Markets
Governor Newsom’s executive order on government insiders using non-public information to profit from prediction markets. Source: California Governor

An announcement from Newsom’s office listed several instances of political insiders using non-public information to profit from prediction markets, including six suspected political insiders who profited from US strikes on Iran.

Newsom’s office also cited another case of suspected insider trading, which occurred in January, after one Polymarket trader netted $410,000 betting that the US would arrest former Venezuelan leader Nicolás Maduro hours before his capture.

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Prediction markets have come under scrutiny from US lawmakers, who argue that political insiders are using the platforms to unfairly benefit from their positions and are potentially threatening national security by wagering on sensitive events like war and elections.

Related: Detroit set to enter Michigan‘s battle against Coinbase prediction markets

US lawmakers accelerate prediction market crackdown after insider allegations surface

Texas Congressman Greg Casar and Connecticut Senator Chris Murphy introduced the “Banning Event Trading on Sensitive Operations and ​Federal Functions (BETS OFF) Act” in March 2026 in response to the prediction market insider trading allegations.

The bill seeks to prohibit government insiders from using prediction platforms to profit from markets tied to war or death. 

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California, US Government, United States, Prediction Markets
Congressman Greg Casar announces the “Bets Off Act.” Source: Congressman Greg Casar

US Representative Adrian Smith and Representative Nikki Budzinski also introduced similar legislation in March, titled the “Preventing Real-time Exploitation and Deceptive Insider Congressional Trading (PREDICT) Act.”

The legislative proposal prohibits the US President, lawmakers and other high-ranking government officials from betting on prediction markets.

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