Event Review 📊

Recently, amidst the severe turbulence in the cryptocurrency market, the price performance of ETH has been particularly noteworthy. Within just a few minutes, reports from trading platforms indicated that ETH had broken through key support levels. Initial data showed that at 7:46, ETH was priced at $3292.76 on the OKX exchange, after which the market began to exhibit clear downward signals. Subsequently, between 7:50 and 8:04, the price of ETH plummeted to $3215, a decline of 2.59%, triggering anxiety across the market.

Meanwhile, reports of liquidations across the network indicated that the total liquidation amount in the past hour reached as high as $554 million, with approximately $73.13 million attributed to ETH. The chain reaction of liquidations caused by high-leverage trading, automatic stop-losses, and panic selling further pressured the market, leading investors to adopt a risk-averse sentiment. Additionally, uncertainties at the macro level, such as turmoil among Federal Reserve officials and Trump's frequent interventions in policy, have set the stage for ETH's dramatic fluctuations.

Timeline ⏰

• 07:46: The market shows initial signs of fatigue, with ETH priced at approximately $3292.76 on OKX, and downward pressure begins to emerge.
• 07:50: Market volatility intensifies, with ETH hovering around $3300, followed by signs of a sharp decline.
• 08:04: In just 14 minutes, ETH plummets from $3300 to $3215, a drop of 2.59%, with significant selling pressure.
• 08:10: The overall cryptocurrency market experiences a flash crash, triggering a large number of stop-losses and panic liquidations.
• 08:20: ETH breaks below the $3200 mark again, with the current price around $3194.40.
• 08:21: Another set of data indicates that since 7:50, ETH has dropped from $3241 to $3175, a decline of approximately 2.04%.
• 08:22: Network-wide data shows that the total liquidation amount has reached $554 million, with long positions being liquidated at a much higher rate than short positions.
• 08:32: Signs of some accumulation appear in the market, with ETH's price slightly rebounding to $3196.01.

Reason Analysis 🔍

The sharp fluctuations in ETH can be attributed to two core reasons:

1. Increased Uncertainty in Macro Policies and Regulations
   Recent news indicates that senior officials at the Federal Reserve are facing investigations, with signals of judicial involvement and Trump's frequent interventions in Fed policies. This situation has led to global market doubts regarding macro policies and regulatory directions, prompting investors to adopt a risk-averse stance, thereby increasing selling pressure in the cryptocurrency market.

2. Chain Reaction of Liquidations Triggered by High-Leverage Trading
   Data shows that a large number of long positions were liquidated in a short period, with the chain reaction of liquidations quickly spreading throughout the cryptocurrency market. High-leverage traders frequently triggered stop-losses during price fluctuations, leading to tightened market liquidity and exacerbated panic selling, causing ETH's price to sharply decline in a short time.

Technical Analysis 📈

Based on the 45-minute candlestick chart of Binance's USDT perpetual contract, we can summarize the following technical signals:

• Death Cross: EMA10 crosses below EMA20, forming a clear death cross, indicating an enhanced bearish signal in the medium term.
• MACD Downtrend: MACD declines and crosses below the zero line, showing a weakening market momentum.
• Oversold Area: RSI drops below 30, entering an oversold state, with a very low J value, indicating a potential for a rebound in the oversold zone.
• Surge in Trading Volume: Trading volume spikes by 1430.93% in a short time, but prices decline, indicating that panic selling dominates the market.
• Candlestick Patterns: Signs of a belt hold line and consecutive bearish candlesticks (three black crows pattern) reflect persistent selling pressure; simultaneously, MA5, MA10, and MA20 are in a bearish arrangement, with prices consistently below multiple moving averages, indicating a clear overall bearish trend.
• OBV Indicator: Breaks below previous lows, indicating strong selling power, with market funds gradually flowing out.

Market Outlook 🔮

After experiencing short-term severe fluctuations and a series of liquidations, market sentiment remains cautious. Although technical indicators show that ETH is in the oversold zone, suggesting a potential for a technical rebound in the short term, the current low price area is still filled with uncertainties. Looking ahead:

• If clear guidance emerges from macro policies or global economic risks ease, it may lead to a capital inflow into the cryptocurrency market, thereby driving price rebounds.
• From a technical perspective, investors need to monitor whether key support levels hold firm; if they fail to stabilize, there may still be a search for new lows in the short term.
• The risks associated with high-leverage trading are unlikely to be eliminated in the short term, and the market requires more bottom-buying intervention to alleviate the chain reaction of liquidations.

In summary, ETH is currently in a phase of intense volatility and concentrated uncertainty. It is advisable for investors to remain rational, closely monitor macro policies and market capital flows, reasonably allocate positions, and timely adjust risk exposure. The future market is likely to oscillate between panic and accumulation, and a rational response is key to navigating through this volatile period.

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