🔥 Event Review

Around 22:04 last night, the market began to show signs of volatility, with the price of ETH/USDT dropping to approximately $2998.40 on some platforms, attracting market attention. Shortly after, around 22:15, the price of ETH plummeted from about $3028 to $2942, a drop of 2.83% within 10 minutes, triggering a chain reaction of liquidations in high-leverage positions. Subsequently, from 22:15 to 22:33, the price further declined from about $2951 to $2925, and panic sentiment quickly spread. On-chain data showed that many accounts were forcibly liquidated as ETH fell to around $2900, with one account attempting to quickly "re-enter" after a loss of $738,000. Traders like "Ma Ji Da Ge" also faced significant fluctuations in their positions, quickly restarting long positions after being liquidated, reflecting the current market's behavior of panic selling alongside attempts to quickly recover positions after cutting losses. The latest observed price has fallen to about $2942.5; although short-term market sentiment has slightly calmed, overall volatility remains intense.

⏰ Timeline

• 22:04 – Initial market volatility, ETH price around $2998.40, attracting attention.
• 22:15 – ETH price suddenly dropped from about $3028 to $2942 (a drop of 2.83%), triggering a chain of stop-loss liquidations in high-leverage positions.
• 22:15 to 22:33 – Under the chain reaction, the price further declined from about $2951 to $2925.
• 22:36 – On-chain data showed multiple high-leverage ETH long positions were forcibly liquidated as the price fell to around $2900, with some accounts quickly reopening positions after losing hundreds of thousands of dollars.
• 22:40 – After "Ma Ji Da Ge" was completely liquidated, he quickly reopened long positions, currently holding about 2200 ETH.
• 22:54 – The latest price observation after adjustment is about $2942.5, with significant volatility still evident in the short term.

🔍 Cause Analysis

The sharp fluctuation in ETH prices can be attributed to two main factors:

1. Chain Liquidation Effect
   High-leverage long positions were rapidly liquidated as prices hit key support levels, forcing some traders to close positions upon reaching stop-loss conditions, which in turn triggered panic selling in the market. As a large number of accounts were liquidated, coupled with some traders eager to re-enter, the selling pressure in the market intensified, creating a clear chain reaction.

2. Dual Impact of Macroeconomic Policies and Market Sentiment
   In addition to technical factors, recent news indicating regulatory policy changes in multiple countries and adjustments in the Federal Reserve's interest rate expectations have increased market uncertainty. Changes in macro policies, tightening regulations, and investors' risk-averse sentiment have all placed significant volatility pressure on a market already concentrated in high-leverage operations. The uncertainty of the external economic environment, combined with the technical chain liquidations, has driven prices down rapidly.

📈 Technical Analysis

Based on Binance's USDT perpetual contract 45-minute candlestick data, the current technical performance of ETH is as follows:

• Clear Oversold Signals: RSI has fallen below 30, entering the oversold zone; the J value indicates an extreme low, suggesting a potential rebound in the short term.
• Bollinger Bands Indicator: The price has broken through the lower Bollinger Band and is moving along the lower band, with the %B indicator falling below 0.0, indicating an oversold state outside the technical support range.
• Volume Support Analysis: Recent trading volume surged by 1473.47%, and the volume is negatively correlated with price, indicating strong panic selling pressure. The OBV indicator has fallen below previous lows, showing a significant increase in selling power.
• Moving Average Arrangement: The price is below the MA5, MA10, MA20, MA50, and EMA5/10/20/50/120 moving averages, presenting a bearish arrangement, with frequent appearances of black three soldiers in candlestick patterns, further confirming the current downtrend.

Overall, technical indicators show strong short-term downward pressure, but oversold indicators also provide conditions for a potential rebound. Traders need to closely monitor whether effective buying can form near key support levels and moving averages.

🌟 Market Outlook

After experiencing such severe volatility and a chain of liquidations, market sentiment currently appears fragile. In the short term, investors should remain cautious:

• Short-term Trading Suggestions: Given that the RSI and other oversold indicators show potential rebound signals, buying on dips may present opportunities after waiting for a pullback to stop the decline, but strict control of positions and risks is essential to prevent the possibility of further liquidations.
• Medium to Long-term Holding Perspective: As a core asset of the ecosystem, ETH still has strong fundamental support. However, short-term policy uncertainties and market sentiment fluctuations may lead to further volatility. It is advisable to pay attention to subsequent macro policy trends and changes in market capital flows.
• Risk Prevention: In an environment where high leverage frequently leads to liquidations, reasonably adjusting leverage ratios, setting stop-loss orders in advance, and diversifying risks remain important strategies for coping with the market's severe volatility.

In summary, although the current market sentiment is heavily fearful and the technical indicators are in an oversold state, as the market gradually digests the volatile adjustments, there is potential for a rebound from the bottom. Investors should manage their funds patiently while waiting for clearer reversal signals, considering their own risk tolerance and market dynamics.

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