Finance

Is Ethereum’s Rally a Mirage? Analyst Warns of Potential Drop to $2,800 After Short Squeeze

Analyst warns Ethereum‘s rally is a “false signal,” predicting a drop to $2,800 after a short-squeeze-fueled bounce.

November 8, 2025, 9:36 AM

Physical Ethereum coin standing before a multicolored, blurry technical analysis chart.

The Ethereum coin is placed in front of a colorful, upward-trending financial analysis chart. By William Potter / Shutterstock.com.

Executive Summary

Crypto analyst Ted warns that Ethereum’s recent rebound near $3,460 may be a “false signal,” predicting a potential drop to $2,800 before a genuine uptrend.

The recent 5% daily surge in Ethereum’s price is attributed to short liquidations, totaling over $133.83 million, rather than robust buying interest.

The analyst highlights $3,200 as a crucial support level to monitor, stating that a failure to hold this point could trigger further selling pressure.

The Story So Far

The recent temporary rebound in Ethereum’s price is primarily driven by short liquidations rather than robust buying interest, leading analyst Ted to caution that this constitutes a “false signal” indicative of a typical bearish market trap, suggesting further significant price drops before a genuine uptrend can establish.

Why This Matters

The recent Ethereum price rebound, driven by short liquidations rather than genuine buying interest, is likely a false signal, potentially leading to a significant price drop for the cryptocurrency. Investors should be cautious as analyst Ted predicts a fall towards the $2,800 mark, emphasizing that the $3,200 level is crucial to watch as its failure to hold could trigger further selling pressure and a prolonged bearish market.

Who Thinks What?

Crypto analyst Ted cautions that Ethereum’s recent rebound is likely a “false signal” driven by short liquidations rather than genuine buying interest, predicting the cryptocurrency could drop to $2,800 before a true uptrend begins.

The market has seen Ethereum’s price experience a 5% daily surge, climbing near the $3,460 level, which was primarily fueled by over $133.83 million worth of short liquidations.

Despite a recent rebound that saw Ethereum (ETH) climb back near the $3,460 level, a prominent crypto analyst known as Ted is cautioning investors that the recovery might be a “false signal.” The analyst suggests that the second-largest cryptocurrency could face another significant price drop before establishing a genuine uptrend, potentially falling to the $2,800 mark.

Short Squeeze Fuels Temporary Bounce

The recent 5% daily surge in Ethereum’s price appears to be driven by short liquidations rather than robust buying interest, according to Ted. Data indicates that over $133.83 million worth of ETH positions were liquidated, forcing traders betting against Ethereum to close their positions. This activity can create a rapid, temporary price increase that mimics a rally but lacks underlying market support.

Ted warns that such short-term bounces are common traps in bearish markets, often preceding further declines. While the liquidations provided a brief sense of relief, the analyst believes the market structure remains heavy, suggesting the earlier downturn was merely a pause.

Analyst Predicts Drop to $2,800

The crypto analyst points to strong resistance zones for Ethereum between $3,700 and $3,800, levels where ETH has repeatedly failed to sustain upward momentum. Until these critical resistance points transform into support, the market is likely to remain under bearish pressure.

Ted’s analysis anticipates a potential drop towards the $2,900–$3,200 range, an area that has previously served as a key support level. Should this zone fail to hold, Ethereum could slide further, potentially reaching around $2,800 before finding more solid ground.

Key Level to Watch: $3,200

Currently, Ethereum is trading around $3,446, reflecting the 5.2% jump observed over the last 24 hours. However, the analyst emphasizes that the $3,200 mark is a crucial level to monitor. Maintaining support above this price point could allow bulls to rebuild momentum, but a slip below it could trigger another wave of selling pressure.

Market Outlook

The recent rally in Ethereum’s price may be a deceptive move, with analyst Ted forecasting further downside before a true recovery can begin. Investors are advised to watch the $3,200 level closely, as its ability to hold could dictate Ethereum’s short-term trajectory.