Event Review 📉➡️🚀
In the morning session of the day, ETH experienced a dramatic price fluctuation. The market initially saw a panic sell-off and high leverage position liquidations, causing ETH to drop to a low of around $1736 in a short period. However, as a "short sniper" closed 2200 ETH short positions and made a profit of about $140,100, the short pressure in the market was quickly released, and buying began to surge back. Within just 51 minutes, the price of ETH rebounded sharply from the low to around $1907, with a cumulative increase of nearly 9.43%, ultimately stabilizing at around $1908.54 at 09:30. This round of fluctuations not only showcased the rapid reversal of market sentiment but also reflected the extreme market changes under the interplay of multiple factors.
Timeline ⏰
- 08:06: News broke that ETH had fallen below a key support level in the OKX trading pair, with the price briefly reported at $1801.59, exposing risks of high leverage positions and signs of panic selling.
- 08:10: The price of ETH continued to decline, reaching a low of about $1736, with some institutions and retail investors showing willingness to buy the dip.
- 08:16: The "short sniper" closed 2200 ETH short positions, making a profit of about $140,100, alleviating short pressure and laying the groundwork for the subsequent rebound.
- 08:10 to 09:00: During this 51-minute period, the price of ETH surged from about $1736 to around $1907, an increase of 9.43%, indicating strong buying intervention.
- 08:10 to 09:30: Overall, the price of ETH rose from about $1765 to $1923, with a cumulative increase of about 8.90%, as market sentiment gradually warmed.
- 09:30: The trading price of ETH settled at around $1908.54, marking the end of the volatile phase and entering a consolidation period.
Reason Analysis 🔍
The dramatic fluctuations in this market were driven by two core reasons:
Increased Uncertainty in External Macroeconomics and Policies
Recent global financial markets have been influenced by a series of U.S. policies and economic events, including risks of partial government shutdowns, troop increases in the Middle East, and military pressure on Iran. These macro events have heightened market uncertainty regarding future monetary policy and liquidity conditions, exacerbating risk-averse sentiment and impacting crypto assets.High Leverage Trading and Chain Liquidation Effects
Many institutions and whales in the market operate with high leverage products, and once prices briefly drop, automatic liquidations are quickly triggered. The chain liquidation effect led to a large number of short positions being closed, resulting in rapid capital release and pushing prices back up. Additionally, nearly $7 million in liquidations occurred across the network in about an hour, with short positions accounting for about 67%, reflecting the fierce confrontation between bulls and bears amid extreme market turbulence.
Technical Analysis 📊
This technical analysis is based on Binance USDT perpetual contract 45-minute candlestick data for ETH/USDT:
Indicator Performance
MACD Golden Cross: A buy signal has formed, but the J value is in an extremely overbought state, indicating increased risk of a pullback;
KDJ Indicator: Shows a clear divergence, with overall upward momentum strengthening;
TD Sequential: Currently in a bullish Setup phase (6/9).
Moving Average Analysis
Short-term moving averages (MA5, MA10, MA20) are in a clear bearish arrangement, with prices below EMA20/50/120, indicating a bearish outlook in the short term;
The slope of EMA20 is steeply downward (about -1.64%), while EMA120 is also on a downward trend (about -0.95%), showing that long-term downward momentum remains strong;
At the same time, prices are below both EMA24 and EMA52, and these two moving averages are also showing a downward trend (EMA24 about -1.65%, EMA52 about -1.38%).
Volume Dynamics
In the past hour, the total liquidation amount reached $7 million, while the net inflow of main funds was about $40 million, indicating that after experiencing panic liquidations, capital quickly flowed back into the market, and short-term trading activity increased.
Overall, some technical indicators (such as the MACD golden cross and TD Sequential bullish) show short-term rebound signals; however, long-term moving averages and arrangements of moving averages still maintain a bearish pattern, with the market in a state of adjustment and consolidation.
Market Outlook 🔮
After experiencing significant fluctuations, ETH is currently in a consolidation phase. In the short term, the buying pressure released from panic liquidations may continue to support prices, leading to further upward fluctuations; however, in the medium to long term, the uncertainties in the macro economy and strong downward momentum cannot be ignored. Future investors should pay attention to the following points:
- Market Divergence and Sentiment: With both institutional funds and retail investors showing willingness to buy the dip, market sentiment may continue to fluctuate in the short term, but overall risk appetite may be constrained by changes in external macro policies.
- Technical Support: If key resistance levels can be effectively broken and institutions intervene in positions, a local rebound may be initiated; conversely, if long-term moving average support is breached again, the risk of a pullback still exists.
- Trading Strategy: It is recommended that investors maintain cautious operations in the current high-volatility environment, building positions in batches at low levels while focusing on risk control to avoid liquidation risks in a high-leverage environment.
In summary, ETH is currently in a short-term rebound phase following market turbulence and panic liquidations, but against the backdrop of intertwining global macro policies and high leverage trading, future trends remain uncertain. Investors should seize short-term trading opportunities while remaining rational and attentive to the repair of long-term trends and risk prevention.
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