Ethereum is currently navigating a pivotal liquidity reset zone, coinciding with its price dipping below $3,000. Traders are closely monitoring a crucial line around $3,200 to determine if this level will act as a genuine support or merely a temporary trap.
The liquidity index for Ethereum is rapidly approaching its lowest reset threshold, a level historically associated with market bottoms. According to a recent chart from Swissblock shared by analyst Rand, Ethereum finds itself in a liquidity pocket that previously signaled correction lows in both 2024 and mid-2025.
This liquidity index serves as a barometer for the broader market structure supporting Ethereum. In prior cycles, whenever the index fell to zero, it marked the onset of extended bottoming phases, indicated on the chart with red shading. These phases typically followed significant drawdowns but eventually led to price recoveries as liquidity was restored.
The current scenario mirrors previous resets, with liquidity dropping sharply while the price line trends lower. Historical data suggests that these resets have often resulted in multi-week stabilization periods, followed by a return of upward momentum. The observed sequence of liquidity peaks, resets, bottoming, and recoveries is once again in play for Ethereum.
Currently, this price drop is accompanied by a general contraction in market depth across leading exchanges. As liquidity diminishes, downward movements can become more pronounced. However, historical patterns indicate that such collapses tend to relieve selling pressure, enabling the market to establish a base.
Rand emphasized that past resets have signaled market bottoms, and the current chart aligns with this assertion. The timing of these resets often coincides with significant liquidity washouts, where trading flows reverse after reaching structural extremes. While the indicator does not predict how long these phases will last, its cyclical nature provides reliable signals; as liquidity begins to recover, price movements typically follow suit.
Ethereum now stands at a critical juncture, indicating a potential transition that could lead to the early stages of market recovery.
To regain a bullish structure, Ethereum must reclaim the $3,200 level. The daily chart from trader TedPillows illustrates the price trading below a crucial former support area around $3,200, which now presents the first significant obstacle for any recovery attempt.
The chart also highlights a narrow support shelf just above $2,950, where buyers previously attempted to halt the decline. Should Ethereum manage to hold this support level, the potential for a rebound into the $3,200 range increases. A successful reclaim of this level could reset short-term momentum and pave the way toward the $3,400–$3,600 supply zone, where substantial selling pressure has historically emerged.
Conversely, failure to maintain the current support would result in continued downside pressure, prompting a shift toward lower green demand zones between approximately $2,850 and $2,700, areas where buyers had previously entered the market.
In summary, the upcoming days will be critical for Ethereum as it tests these key levels that could determine the trajectory of the cryptocurrency in the near term.
