Event Review 📉

Recently, the ETH market experienced a significant fluctuation. At the opening, the ETH price stabilized at around $4000, but soon faced a sharp decline. Data shows that within just 1 hour and 45 minutes, the price dropped from about $4001 to $3822, a decrease of approximately 4.47%; another set of data indicated that within 111 minutes, the price rapidly fell from $4005 to $3838 (a drop of about 4.16%). Subsequently, some buyers took the opportunity to accumulate at lower prices, and by 02:15, the latest observed market price rose to $3887.01. Overall, the market was impacted not only by macro news but also by technical chain liquidations that intensified selling pressure.

Timeline ⏱

• 00:00: The market opened, with the ETH price hovering around $4000. At this time, expectations of a Federal Reserve interest rate cut and news of political uncertainty in the U.S. began to take shape, leading to cautious investor sentiment.
• 00:00～01:45: The market faced strong selling pressure, with the ETH price plummeting from about $4001 to $3822, severely impacting key support levels. Large sell orders and chain liquidation events occurred frequently, causing rapid capital outflow and heightened market panic.
• 02:15: The latest data showed that the ETH price rebounded to about $3887.01, indicating that some capital began to accumulate at lower levels, but the overall market remained in a state of turbulence and severe volatility.

Cause Analysis 🔍

The significant fluctuation in ETH is mainly attributed to two factors:

1. Macroeconomic and Policy Uncertainty
   Recently, expectations of a Federal Reserve interest rate cut, the failure to pass a temporary spending bill, and ongoing policy disputes have led to market concerns about liquidity and risk outlook. With a decline in risk appetite, investors shifted towards more stable asset allocations, resulting in selling pressure in the cryptocurrency market.

2. Technical Chain Liquidation Effect
   On the technical side, after the ETH price broke below the key support level (around $4000), it triggered a large number of long position liquidations and explosive order events. Data shows that within the last hour, the total amount of liquidated contracts across the network reached $40 million, with long positions accounting for as much as 87%. This chain liquidation effect exacerbated market panic, causing prices to drop further.

Technical Analysis 📊

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

• Bollinger Band Analysis: The price is close to the lower Bollinger Band. Although there was a brief rebound, if it continues to move along the lower band, it indicates that the market is weak, and short-term buying requires more confirmation signals.
• KDJ and RSI Indicators: The KDJ indicator shows a significant oversold signal, and the RSI has also entered the oversold zone, which may trigger a short-term rebound after some selling, but this will only be effective if macro risks ease.
• Moving Average System: The price is currently below the MA5, MA10, MA20, MA50, as well as EMA5, EMA10, EMA20, EMA50, EMA120, with all moving averages showing a bearish arrangement, indicating that the overall downtrend in the medium to short term is still ongoing. Additionally, EMA24 and EMA52 also show a steep downward slope.
• Volume Observation: Trading volume has significantly increased compared to the average volume over the last 10 days (up about 68.24%), accompanied by large sell orders and a net outflow of $100 million, indicating that market activity is unusually high, with significant capital outflow pressure.

Market Outlook 🚀

Although some capital has been observed accumulating at lower levels, with the price rebounding to $3887 at 02:15, overall market sentiment remains low, and risk appetite is still insufficient. Future trends may need to focus on the following aspects:

• Changes in Macroeconomic Policy: If the Federal Reserve or other important economic data shows positive developments, it may improve market liquidity and alleviate panic, thus providing support for prices; conversely, ongoing uncertainty will keep ETH under pressure.
• Key Technical Support: Changes in technical indicators such as RSI, Bollinger Bands, and the moving average system will become critical reversal signals in the short term. Investors should pay attention to whether buy signals form and whether there are clear signs of stabilization.
• Risk Control: In the current volatile environment, it is advisable to remain cautious, manage positions reasonably, and keep a close eye on market liquidation data and large transaction dynamics to ensure proper capital defense and risk allocation.

In summary, the recent significant fluctuation in ETH reflects the impact of global macroeconomic uncertainty on market sentiment and exposes the accelerated decline caused by technical chain liquidations. Whether the market can rebound in the future will depend on favorable macro news and stabilization signals from technical indicators, while investors should remain cautious and closely monitor market trends to accurately seize opportunities amid volatility.

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