⏰ Event Review

In the early hours of today, the ETH market experienced significant volatility. The event was triggered by the Federal Reserve's announcement at 02:00 to maintain the federal funds rate in the range of 4.25%–4.5%, while deliberately removing the phrase "economic uncertainty has diminished" from its latest statement. Although this decision aligned with market expectations, some Federal Reserve officials (such as Waller and Bowman) publicly expressed support for interest rate cuts, leading to increased uncertainty about future policy directions. Coupled with signals from Trump and the White House regarding related policies, the overall macroeconomic environment's uncertainty intensified, causing many investors to adopt a cautious stance, which triggered technical stop-loss orders and a chain of liquidations, resulting in a rapid decline in ETH prices.

🕒 Timeline

• 02:00: The Federal Reserve announced that it would keep interest rates unchanged while removing previous language that was favorable to the economic outlook, heightening market concerns about future policy changes.
• 02:30: ETH price reached a high (around $3813), and market sentiment began to come under pressure, triggering a series of long stop-loss orders.
• 02:30–03:05: Amid intense opposition between bulls and bears, the ETH price quickly dropped from around $3806 to $3670, a decline of 3.57%, resulting in a large number of long positions being liquidated.
• 03:30: The price rebounded to $3722.99; although there was some recovery, overall market volatility remained high, and investor sentiment continued to appear cautious.

🔍 Cause Analysis

The sharp volatility in ETH can be attributed to two main factors:

1. Macroeconomic Policy Uncertainty
   The Federal Reserve's removal of the phrase "economic uncertainty has diminished" from its statement reflects policymakers' lingering doubts about the future economic outlook. Additionally, the support for interest rate cuts from some officials has led to increased speculation about the Federal Reserve's subsequent actions. Overall, these factors have intensified market distrust regarding the economic outlook, prompting a reduction in risk appetite.

2. Technical Stop-Loss and Liquidity Trigger Effects
   As the ETH price hovered at high levels, long stop-loss orders distributed at key support levels were quickly triggered. The involvement of high-frequency and algorithmic trading further amplified selling pressure, leading to a sharp price drop in a short period. A large number of liquidation events and net outflows from major players also confirmed the technical characteristics of this volatility.

📊 Technical Analysis

Based on Binance USDT perpetual contract ETH/USDT 45-minute candlestick data, we observe the following points:

• Indicator Changes

• The KDJ indicator shows divergence, indicating that selling pressure is gradually increasing.

• The trading volume of the 10-day moving average has increased by 47.51% compared to the previous period, and the trading volume of the 20-day moving average has risen by 42.14%, indicating a significant increase in trading activity in the short and medium term.

• Moving Average Trends

• The price is currently below the MA5, MA10, MA20, and MA50 moving averages, which are in a bearish arrangement, indicating a weak trend.

• In the EMA system, the price is also below EMA5, EMA10, EMA20, EMA50, and EMA120, indicating a downward channel in the short to medium term.

• Candlestick Patterns

• A doji candlestick pattern has appeared, reflecting market indecision, which may signal an impending trend reversal.

• The price is approaching the lower bound of technical indicators and is in an oversold state; simultaneously, the TD price reversal signal is beginning to emerge, suggesting a potential short-term rebound.

• Market Sentiment

• In the past hour, the total liquidation amount across the network reached approximately $20 million, with 95% being long positions, indicating that a large number of long positions were forcibly closed near key support levels.

• Net outflows of major funds also amounted to about $20 million, showing that institutions and large players are cautious about the future market.

🔮 Market Outlook

Currently, although ETH has experienced a sharp decline, some technical signals indicate that the price may have entered an oversold area. In the short term, investors should pay attention to the support situation in the $3670 to $3723 range. Once the stop-loss orders are mostly released, a local rebound may occur. The TD price reversal signal and the doji candlestick pattern both suggest that the market may have an opportunity for short-term stabilization.

However, macroeconomic uncertainties remain unresolved, and future policy directions from the Federal Reserve, as well as changes in U.S. economic data, could trigger further market volatility. Investors need to comprehensively consider both fundamental and technical signals when entering the market, exercise caution in their positioning, and manage risk.

Overall, the sharp volatility in ETH is a direct reflection of macroeconomic policies and market pessimism, as well as the combined effects of technical stop-losses and algorithmic trading. In the coming period, the market may remain in a high-volatility state, and it is advisable for investors to stay calm, closely monitor subsequent data and policy directions, and look for appropriate entry and exit opportunities.

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