Event Review 🔍

In the early hours of yesterday, the ETH market experienced a remarkable and intense fluctuation. As early as 02:48, the ETH price surged towards $5000, setting a new high and successfully attracting widespread market attention. However, within just a few minutes, market sentiment took a sharp downturn: due to changes in macroeconomic expectations and a chain reaction of liquidations triggered by high-leverage trading, ETH began to plummet at 03:10, briefly dipping to around $4741 at 03:35. Although the price slightly rebounded to $4776.54 by 04:05, the overall volatility and market panic had not completely dissipated.

Timeline 🕒

• 02:48: ETH price surged significantly, reaching a new high and approaching the $5000 mark, laying the groundwork for subsequent fluctuations.
• 03:10: The market began to show selling pressure, with ETH hovering in the $4950–$4957 range, indicating signs of profit-taking.
• 03:21: ETH broke below the key support level of $4871, triggering market panic and exacerbating the chain liquidation phenomenon.
• 03:35: In just 25 minutes, the ETH price quickly dipped to $4741, with a cumulative decline of over 4%.
• 04:05: The price briefly warmed up to $4776.54, but the overall market remained cautious and in a state of adjustment.

Reason Analysis 🔎

The sharp fluctuation of ETH was mainly influenced by the following factors:

• Shift in Macroeconomic Policy
  Recent expectations of interest rate cuts by the Federal Reserve and uncertainty signals from the Jackson Hole meeting have led investors to reassess the future liquidity and interest rate environment. Concerns over declining future yields prompted some institutions and retail investors to quickly adjust their positions, thereby intensifying profit-taking in risk assets.

• High-Leverage Trading and Chain Liquidations
  High-leverage trading is prevalent in the market, and the price correction triggered a large number of forced liquidations of long positions. This chain reaction not only amplified the price decline but also led to panic selling in a short period, resulting in a surge in trading volume and further market volatility.

• Outflow of Major Funds
  In the short term, data showed that the net outflow of major funds reached tens of millions of dollars, and the concentrated withdrawal of funds tightened market liquidity, exacerbating price fluctuations.

Technical Analysis 📊

Based on the 45-minute candlestick data of the ETH/USDT perpetual contract on Binance, we observed the following technical signals:

• Indicator Signals

• RSI fell below the 50 midline, indicating increased short-term downward pressure.

• The price rebounded from the upper Bollinger Band and then declined, crossing the middle band, forming a typical sell signal.

• The KDJ indicator showed divergence, with a clear downward momentum; the OBV indicator crossed below the moving average line, also indicating enhanced selling pressure.

• Abnormal Trading Volume

• Trading volume surged by 537.90%, far exceeding the average volume of the recent 10 periods, indicating escalating panic selling.

• The 10-day and 20-day average volumes increased by 141.80% and 102.13%, respectively, showing unusually active short- to medium-term trading.

• Candlestick Patterns and Moving Average System

• A Evening Star and Belt Hold pattern appeared, reflecting a potential bearish reversal at the top.

• Although the short-term moving averages (MA5, MA10, MA20) are in a bullish arrangement, the current price is encountering resistance near MA20; a certain support is formed near the mid-term MA50.

• In the long term, the price remains above EMA120, indicating that the ultra-long-term upward trend has not changed, but the TD Sequential indicator is currently in a bearish Setup phase (8/9), suggesting a potential price reversal signal in the short term.

• Moving Average Dynamics

• The price is currently below EMA24 but above EMA52, reflecting an adjustment within the upward trend; the upward slope of EMA52 (0.45%) suggests that the mid-term trend still has some support.

Market Outlook 🚀

Considering the event review, macro factors, and technical analysis, the ETH market is expected to remain in a state of high volatility in the short term. Future trends should focus on the following aspects:

• Key Support and Resistance
  The $4871 level is an important support level worth monitoring; if it breaks, it may trigger further chain liquidations; at the same time, the price is encountering significant resistance near MA20.

• Market Sentiment and Liquidity
  The uncertainty of macro policies and the risks brought by high-leverage trading indicate that market sentiment may continue to deteriorate. Investors should remain cautious during market adjustments and prioritize risk control.

• Long-Term Trends and Short-Term Volatility
  Despite the sharp decline in the short term, ETH still maintains an ultra-long-term upward trend from a long-term perspective. Medium- to long-term investors can focus on positioning during the pullback process, while short-term traders should closely monitor technical indicators and abnormal changes in trading volume to guard against further volatility risks.

Overall, ETH is currently at a crossroads of macroeconomic games and technical reversals. In the face of intense market fluctuations, rational operations and effective risk control measures will be key for investors to navigate market volatility.

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