Event Review 📈

Recently, Ethereum has reached an important technological milestone—the Fusaka upgrade. This upgrade mainly focuses on network expansion, reducing Layer 2 costs, and enhancing decentralization, releasing a positive signal of "secure scalability" and boosting the confidence of institutions and long-term investors in the future of the Ethereum ecosystem. With the official announcement of the upgrade, the market reacted sharply in a very short time, with ETH prices quickly rising, followed by some profit-taking adjustments. Overall, this wave of market activity fully reflects the dual response of the market to technological advancements and expectations of macroeconomic easing policies.

Timeline ⏰

• 22:33 – Ethereum officially announces the launch of the Fusaka upgrade, conveying positive signals for expansion and cost reduction.
• 22:35 – The market rapidly responds to the upgrade news, with ETH prices soaring from an initial $3054 to $3139, an increase of about 2.78%.
• 22:35～22:46 – During a brief period of fluctuation, the price slightly rises from about $3120 to $3122, indicating gradual profit-taking involvement.
• 22:41 – A key support level is breached, with prices on some exchanges (such as OKX) touching $3112, confirming active market buying.
• 23:11 – With profit-taking, ETH prices adjust to $3089.37, showing a short-term correction after the rapid rise.

Reason Analysis 🔍

1. Technological Upgrade Dividend
   The launch of the Fusaka upgrade lays a solid foundation for Ethereum's future development. The measures for network expansion and reducing Layer 2 costs not only optimize user experience but also enhance the competitiveness of the ecosystem. This milestone event provides ample investment confidence for institutions and long-term funds, serving as a significant intrinsic driving force for the rapid rise in prices.

2. Macroeconomic Easing and Liquidity Improvement
   With softening economic data and increasing expectations for interest rate cuts, overall market liquidity has improved. The loose macroeconomic environment stimulates demand for risk asset allocation, accelerating the flow of funds from traditional assets to digital assets. In this context, not only Ethereum but the entire cryptocurrency market benefits from the alternating entry of institutional and retail funds.

3. Trading Sentiment and Liquidation Effect
   Data shows that the total liquidation amount across the network reached tens of millions of dollars in a short time, with a high proportion of short positions, indicating that market arbitrage and profit-taking behaviors are quite evident in the short term. At the same time, the net inflow of major funds reached millions of dollars, indicating that institutions are actively positioning near important support levels, providing crucial support for future market movements.

Technical Analysis 📊

This round of market technical analysis is based on Binance USDT perpetual contracts for ETH/USDT 45-minute candlestick data:

• Overbought Signal: The %B indicator breaks above 0.8, with prices nearing the upper band, indicating that the market is in the overbought zone in the short term.
• Trend Indicators: The KDJ indicator shows signs of divergence, with increased downward momentum, suggesting potential short-term correction pressure; at the same time, the OBV indicator breaks above previous highs, indicating that buying power is still accumulating.
• Trading Volume Activity: Recent trading volume surged by 102.59%, with trading volume, short-term averages, and long-term averages all in a bullish arrangement. This indicates active buying interest, with clear short-term bullish signals in the market, but accompanied by high volatility risks.
• Moving Average Arrangement: Prices remain above MA5, MA10, MA20, MA50, and EMA5 to EMA120, with a clear bullish arrangement structure, confirming a strong upward trend in the medium to short term; meanwhile, EMA24 is above EMA52, with an upward slope supporting mid-term bullish expectations.

Market Outlook 🌟

Although there was a significant surge and fluctuation in ETH prices after the event announcement, some profit-taking has already been observed in the short term. Future trends may develop along the following paths:

• Short-term Adjustment Risks: With clear overbought signals and signs of profit-taking, the market may experience sideways movement or slight corrections in the short term. Investors should pay attention to changes in key support and resistance levels and manage their take-profit and stop-loss strategies wisely.
• Mid to Long-term Bullish Expectations: Based on the long-term positive effects of the Fusaka upgrade and the support of macroeconomic easing policies for risk assets, institutional investors remain optimistic about ETH's long-term prospects. If prices stabilize after adjustments and attract further capital, there is potential for continued upward movement.
• Market Volatility Remains High: High trading volume, liquidation effects, and rapid inflows and outflows of institutional funds indicate that the market is still in a high volatility state. Investors are advised to monitor overall market liquidity and policy trends, maintaining a cautiously optimistic attitude.

With the dual push of technological upgrades and policy easing, Ethereum's future is full of opportunities, but the high volatility risks cannot be ignored. Timely technical adjustments and risk management remain core strategies for investors during this phase.

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