Event Review ⚡

In just a few minutes, the price of ETH experienced extreme volatility. Starting from the high points at 22:35 (around $2107 and $2083), the market fell into a cliff-like decline. Under the chain reaction of continuous liquidations and triggered limit sell orders, the price dropped to about $2012 within 31 minutes, and then slid down to $1925. By 23:35, despite a slight rebound, the current price still hovered around $1938.37, with the market overall in a low-level oscillation state.

Timeline 🕓

• 22:35: At market open, the ETH price was approximately $2107 and $2083, with high-leverage trading beginning to brew risks.
• 22:35–23:06: In just 31 minutes, the price plummeted from $2107 to $2012 (a drop of about 4.56%), showing the catalytic effect of forced liquidations.
• 22:35–23:30: Another data set showed the price fell from $2083 to $1925 (a cumulative drop of 7.56%), with panic sentiment continuously escalating.
• 23:35: The latest recorded price was about $1938.37, showing slight rebound but overall sluggishness, with market volatility not yet stabilizing.

Cause Analysis 🧐

The recent ETH crash was mainly driven by the following two factors:

1. High-Leverage Liquidation Chain Reaction
   A large number of investors and institutions adopted high-leverage strategies in pursuit of high returns. Once the price slightly dropped, the automatic liquidation mechanism was quickly triggered, forcing a large number of positions to close, further exacerbating selling pressure and liquidity exhaustion. The continuous large limit sell orders and liquidation events formed a chain reaction, directly causing the price to plummet.

2. Macroeconomic and Policy Uncertainty
   The recent external environment has continuously deteriorated: the U.S. government faces the risk of departmental shutdowns, expectations of Federal Reserve policy adjustments, and Trump's comments on interest rate cuts, all of which have greatly impacted market confidence. At the same time, the tense international political situation and discussions by regulators regarding the digital asset market have sharply reduced risk appetite, leading to rapid capital withdrawal and triggering severe market volatility.

Technical Analysis 📊

Based on the 45-minute K-line data of Binance USDT perpetual contracts, the technical analysis of the ETH/USDT trading pair shows:

• Clear Oversold Condition

• The RSI indicator broke below 30 into the oversold zone, suggesting a potential rebound signal in the short term.

• The price fell below the lower Bollinger Band, and the %B indicator dropped below 0.0, indicating that the price is significantly below the normal volatility range, with heightened market panic selling sentiment.

• Moving Average and Trend Analysis

• The current ETH price is below the MA5, MA10, MA20, MA50, and EMA5, EMA10, EMA20, EMA50, and EMA120 moving averages, with all moving averages showing a perfect bearish arrangement.

• Both EMA20 and EMA120 are sloping downwards, with EMA20's slope at -1.50%, indicating strong downward momentum in the short to medium term; the long-term EMA120 slope is -0.68%, showing an overall bearish trend.

• Other Technical Indicators and Volume Analysis

• The KDJ indicator is also in the oversold area and is beginning to converge, indicating that the short-term trend may weaken.

• The OBV indicator has fallen below previous lows, indicating increased selling pressure.

• Trading volume surged by 448.59%, and in the past hour, the total liquidation amount reached $30 million, with long positions accounting for 93%, while net outflow from major players reached $100 million, all indicating that the market is in a state of extreme panic selling.

Market Outlook 🔮

In the short term, market sentiment is extremely low. Although technical indicators show oversold conditions and some rebound potential (such as RSI possibly recovering first in the oversold zone), the chain selling pressure triggered by high-leverage liquidations may continue to drag down prices. If a significant stop-loss cannot be effectively established, ETH may further test key support levels (such as the $1900 range or even lower).
In the medium to long term, investors need to closely monitor macroeconomic data and policy changes, as well as market liquidity conditions. When macro uncertainties ease and market risk appetite gradually recovers, there may be structural reversal opportunities. However, before that, it is advisable to operate cautiously, avoid high-leverage risks, and focus on reasonable position management and stop-loss strategies.

In summary, ETH is currently caught in extreme volatility caused by automatic liquidations triggered by high-leverage trading and compounded by negative macro news. Investors should remain calm and closely monitor market technical signals to potentially capture future rebound opportunities amid the temporary downturn.

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