• Ethereum experienced a surge in volatility following the US involvement in the Israel-Iran conflict over the weekend.
• Ethereum investors have booked $750 million in combined realized profits and losses since the market began declining on Friday.
• ETH found support at $2,110, near the lower boundary of a broader symmetrical triangle and the 100-day SMA.

Ethereum (ETH) is up 5% on Monday, showing signs of recovery amid reports that Iran has launched missiles at a United States (US) military base in Qatar. The geopolitical tensions sparked an increase in ETH volatility, resulting in a rise in realized profits and losses over the weekend.

Ethereum briefly retreated from $2,300 but quickly bounced back after Iran reportedly launched missiles at a US military base in Qatar, according to Axios. The strike comes as a retaliation for the US attack on three Iranian nuclear sites over the weekend — a move that pushed ETH toward $2,100.

“The market remains at an inflection point, with digital assets straddling the line between risk-on momentum and risk-off defensiveness amid ongoing geopolitical uncertainty,” wrote QCP analysts in a Monday note.

Most ETH long traders bore the consequences of the sustained price drop, with long liquidations reaching nearly $600 million since Friday, according to Coinglass data.

The price decline also saw investors booking about $500 million in realized profits and over $250 million in losses from their selling activity during the same period. The selling was spearheaded by short-term holders, as evidenced by the sharp plunge in the 90 and 180-day Mean Coin Age. A drop in the Mean Coin Age across the different age cohorts represents a rising distribution and vice versa for an increase.

ETH Network Realized Profit/Loss & Mean Coin Age. Source: Santiment

“ETH’s drawdown [has] been accompanied by a 15-point jump in 7-day implied volatility (IV) to 83%, reflecting increased downside hedging and uncertainty,” wrote Sean Dawson, Head of Research at crypto options exchange Derive, in a note to investors on Monday.

“The surge in short-dated IV […] confirms the market is bracing for more instability. Volatility markets are telling us this isn’t over.”

However, investors on the spot market are buying the dip at a modest pace, with three consecutive days of exchange net outflows reaching nearly 110,000 ETH on Monday, according to CryptoQuant’s data.

US spot Ethereum ETFs also stretched their weekly inflow streak, recording $124 million in a ninth consecutive week of net inflows, according to a CoinShares report on Monday.

Outflows in crypto exchanges represent buying and vice versa for inflows. In exchange-traded funds (ETFs), the reverse is true.

After breaking below the lower boundary of a smaller symmetrical triangle and the 50-day Exponential Moving Average (EMA) on Friday, ETH declined over 10% during the weekend. It eventually bounced off the $2,110 key support level near the lower boundary of a broader symmetrical triangle and the 100-day Simple Moving Average (SMA).

ETH/USDT daily chart

If ETH stages a recovery and flips the upper boundary of a descending channel, it could retest the resistance near $2,500. A successful move above this resistance could see ETH rise toward the $2,850 level.

On the downside, ETH could decline further toward $1,800 if it fails to hold the $2,110 key support level.

The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are below their neutral levels but trending upward, indicating a slowdown in bearish momentum.