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Ethereum faces rising risk from thinning market liquidity
Market observers caution Ethereum may face a liquidity trap, as shrinking depth and cautious capital flows raise volatility risks despite stable network fundamentals.
Ethereum is showing signs of entering a potential liquidity trap as on chain data highlights declining trading depth and cautious capital flows.Analysts warn that reduced buyer conviction, coupled with leverage driven positioning, could amplify downside volatility. While network fundamentals remain intact, near term price action may struggle without fresh demand.Traders are closely monitoring support levels, derivatives data, and broader crypto market sentiment for confirmation signals.