Event Review 📉

In just one hour, the price of ETH experienced an unprecedented and severe fluctuation. Starting from a high point at around 00:40 (approximately $2615 or $2597), the market fell into a rapid decline. Some data indicated that the price dropped from about $2615 to $2497 in 46 minutes, a decrease of approximately 4.56%, while another set of data showed a drop from $2597 to $2455 (a decline of 5.44%). Subsequently, near a key resistance level, ETH broke through the $2500 mark, leading to panic selling and the liquidation of high-leverage positions by institutions, causing the overall price to plummet in a short time. Although it slightly rebounded to around $2465.76, the overall downward trend remained evident.

Timeline 🕒

• 00:40
  The price of ETH was at a high, and the market began to be impacted by macroeconomic uncertainties and policy signals. Additionally, some institutions used high leverage to exit the market, initially showing signs of selling pressure.

• 01:01
  On the eve of the U.S. 20-year Treasury bond auction, bond yields approached 5.035%, signaling tightening liquidity and increasing expectations of rising funding costs, which intensified downward pressure on risk assets.

• 00:40–01:30
  During this period, the price of ETH plummeted from about $2615 to $2497 (a drop of 4.56%) and from $2597 to $2455 (a drop of 5.44%), with high-leverage liquidations and large orders frequently disrupting market supply and demand.

• 01:25
  The key resistance level was breached, and news spread that ETH had fallen below $2500. Investors closely monitored this price point, and panic sentiment further spread.

• 01:30–01:50
  The price briefly touched a low of about $2455, followed by a short rebound to around $2465.76, but the overall oscillation pattern remained, with technical signals appearing weak.

Reason Analysis 🔍

Uncertainty in Macroeconomic and Policy Signals
Recently, the U.S. central bank and government have faced dual challenges of economic and inflationary pressures. Federal Reserve officials reiterated the need to reassess the average inflation target, while soaring yields in Treasury bond auctions indicated rising funding costs and tightening liquidity. These messages raised market concerns that future policy adjustments could trigger greater volatility, compounded by congressional discussions on tax legislation and stablecoin regulations, all negatively impacting risk assets.

Institutional Operations and High-Leverage Risks
Multiple high-leverage trades and operations by large institutions in the market triggered severe liquidity fluctuations. When important technical resistance levels were reached, many investors and institutions using high-leverage positions concentrated their liquidations, with large orders suddenly impacting the market, leading to a temporary price crash due to supply and demand imbalances. This panic selling caused by "large players exiting" further deteriorated ETH's price trend.

Technical Analysis 📊

Based on Binance USDT perpetual contract 45-minute candlestick data, current technical indicators show clear bearish signals:

• Moving Average System

• EMA5 crossed below EMA10, indicating a weakening short-term moving average;

• EMA10 crossed below EMA20, showing a mid-term bearish trend;

• The overall price has fallen below EMA5, 10, 20, and even longer-term moving averages, indicating that the price is in a strong downward channel.

• MACD and RSI Indicators

• MACD showed a crossover from bullish to bearish, with clear sell signals;

• RSI broke below the 50 midline and continued downward, indicating accumulating oversold risks.

• Bollinger Bands and Trading Volume

• The price fell below the lower Bollinger Band, entering the oversold area;

• The %B indicator dropped below 0, with recent trading volume surging (one report indicated a surge of 726.01%), indicating significant panic selling pressure;

• At the same time, the OBV indicator fell below previous lows, with selling pressure dominating, and market trading was unusually active.

• Additional Data

• Liquidation statistics showed that approximately $10 million in liquidations occurred across the network in the past hour, with long positions accounting for 84%;

• Net outflow of funds from major players reached $100 million, further confirming the current pessimistic market sentiment.

Market Outlook 🔮

After the current severe fluctuations, the future market trend remains highly uncertain. In the short term, ETH may form a technical rebound in the low range, but challenges remain severe:

• If the macroeconomic and policy environment worsens further, coupled with institutions continuing to significantly reduce positions, ETH may continue to face downward pressure;
• Conversely, if liquidity improves, favorable policy news emerges, and some short-term bottom-fishing funds enter, there may be support for the price to gradually recover in the low range.

Investors need to closely monitor U.S. Treasury yields, Federal Reserve policy trends, and the liquidation status of high-leverage positions in the market. In the short term, the market may continue to exhibit severe oscillations, but in the medium to long term, ETH, as a mainstream digital asset, still possesses certain intrinsic value and rebound potential. Reasonable risk control and timely position adjustments will be important strategies to cope with future market fluctuations.

Overall, this round of volatility reflects the complexity of the global macroeconomic and policy environment and highlights the severe volatility risks brought about by institutional operations within the market. Investors should combine technical and fundamental factors in their operations to flexibly respond to market changes.

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