- Ethereum has completed a bull and bear trap sequence identical to July, setting the stage for another strong upward breakout.
- Short sellers are now fueling the rally as ETH reclaims key levels, creating rapid momentum backed by rising trading volume.
- With sentiment still cautious, Ethereum’s current structure suggests a technical setup for aggressive price action driven by forced buying.
Ethereum (ETH) has once again executed a familiar price pattern that previously preceded a sharp rally. The asset currently trades at $3,820.99, reflecting a 5.36% increase in the last 24 hours and a trading volume of over $26.6 billion.
Ethereum Mirrors July’s Liquidity Trap Sequence
A recent tweet from analyst Merlijn The trader points to a near-identical setup between Ethereum’s current structure and the one seen in late June through early July. According to the analyst, Ethereum has successfully pulled off a textbook combination of bull and bear traps—a pattern designed to shake out both long and short traders.
In the first phase, ETH faked a breakout above resistance, drawing in breakout traders only to reverse quickly. This sharp move liquidated the long positions. The second stage triggered when the price dropped below support, luring in shorts expecting a breakdown. The sudden bounce that followed trapped those short positions, forcing them to cover as the price moved back up.
This sequence, according to the tweet, cleared both sides of the market, producing the liquidity needed for the next upward leg.
Liquidity Traps Fuel Upward Momentum
The resemblance to July’s trap-and-breakout structure has sparked discussion around a potential repeat of Ethereum’s vertical rally. Short sellers who are now trapped may contribute to the upward move, not by choice but by necessity. These forced buy-ins, combined with renewed momentum and FOMO-driven buying, could push prices higher.
The current setup aligns with the previous range, structure, and behavior, which led to a strong rally during July. If the pattern continues, Ethereum may be poised for another swift move upward, driven by market structure rather than external catalysts.
Technical Breakout Clears Resistance
The recovery above key resistance zones has opened up a potential runway for Ethereum’s next phase. With sentiment still recovering from the recent traps, momentum traders and short liquidations could drive near-term price action.
Ethereum’s latest price behavior reaffirms the strategic role of liquidity hunting in market movement. The execution of both bull and bear traps has created favorable conditions for continued upside.
