Event Review 🔥

Since 23:20, the ETH market has experienced a wave of intense volatility. In just 15 minutes, the price plummeted from $2800 to $2736, and then continued to decline from $2746 to $2718 between 23:20 and 23:43. The market revealed risks of internal leveraged positions reaching forced liquidation, while external macroeconomic indicators were sluggish and regulatory policy uncertainty intensified, creating dual pressure that led to heightened panic and selling sentiment among investors.

Timeline ⏰

• 23:20 – The ETH price triggered the first round of sharp decline, dropping from $2800 to $2736 (a decrease of about 2.29%), with some leveraged long positions hitting the forced liquidation line, exacerbating selling pressure.
• 23:20 to 23:43 – The price continued to fall, from $2746 to $2718, with the market under heavy selling pressure due to regulatory uncertainty and macro data drag.
• 23:55 – A key support level was breached, with market data showing ETH had fallen below the important range of $2800, currently reported at about $2743, and the effect of long position liquidation continued to ferment.
• 00:03 – After a brief period of consolidation, the ETH price rebounded to $2742.15, but the overall market remained in a pattern of high selling pressure and risk-averse sentiment.

Reason Analysis 🔍

1. Macroeconomic and Regulatory Uncertainty
Recent data indicating continuous contraction in U.S. manufacturing and a decline in the ISM index suggest a weakening overall economic growth momentum. Additionally, internal disagreements within the Federal Reserve regarding the pace of interest rate cuts and policy communication have collectively triggered market risk-averse sentiment. At the same time, multiple countries have intensified regulation of cryptocurrencies and stablecoins, with a surge in enforcement requests from relevant agencies, shaking investors' confidence in high-risk assets.

2. Leverage Position Risks and Forced Liquidation Effects
On-chain data shows that a large number of leveraged long positions in the market are nearing forced liquidation levels. Some well-known accounts have been forced to add margin or liquidate due to position losses, creating a chain reaction of liquidations. This technical selling further pushed down prices, exacerbating market turmoil and becoming a significant trigger for the recent sharp decline in ETH prices.

Technical Analysis 📊

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

• Surge in Trading Volume: Trading volume skyrocketed by 151.88%, and the current trading volume relative to price is significantly higher than the historical average, indicating unusually active market trading.
• Moving Average Trends: The price is below the MA5, MA10, MA20, MA50 moving averages, with the overall moving averages in a bearish arrangement; both short-term and long-term moving averages are declining, indicating that the downtrend is dominant.
• EMA System: EMA5, EMA10, EMA20, EMA50, and EMA120 are all in a downward channel, with EMA20 showing a steep slope (about -1.04%), indicating strong downward momentum.
• Oversold Indicators: The RSI is currently in the oversold region, suggesting a potential for a local rebound in the short term, but the overall downtrend has not been reversed.
• On-chain Data: In the past hour, the total liquidation amount across the network reached $10 million, with long positions accounting for as much as 88%, reinforcing the current bearish sentiment in the market.

Market Outlook 🚀

After experiencing intense volatility, ETH may present a consolidation pattern in the short term, with local rebound signals pending observation. Looking ahead:

• If macroeconomic sentiment does not improve and the regulatory environment continues to tighten, market risk-averse sentiment may continue to escalate, pushing ETH further down.
• The liquidation effect of leveraged positions may trigger a chain reaction, and investors should pay attention to the performance of key support levels (such as around $2800).
• In terms of technical indicators, although the RSI is in the oversold region and may see a short-term correction, the bearish arrangement of the moving average system suggests that the overall trend remains weak.

Overall, the current market's internal leverage risks and external macroeconomic and regulatory dilemmas are intertwined, leading to significant volatility in ETH prices. In this context, investors need to remain highly vigilant, implement strict risk control, closely monitor reversal signals during price corrections, and cautiously adjust positions and strategies to cope with potential continued market downside risks or local rebound opportunities.

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