Event Review 📰

Recently, the Ethereum (ETH) market experienced severe fluctuations, shocking various investors. Reports emerged that several well-known bloggers issued warnings one after another: "Crypto is done, Ethereum will soon break 2900." Subsequently, whales used 25x leverage to short sell, making tens of millions of dollars in profit in a short time, directly triggering a wave of technical liquidations. The price rapidly dropped from a high position within just a few minutes, followed by a brief rebound, fully reflecting the dual impact of the battle between bulls and bears and the exposure of risks in leveraged trading.

Timeline ⏰

• 01-29 22:49
  Market sentiment suddenly turned to panic, with multiple investors and KOLs issuing risk warnings, indicating that key support levels might be breached.

• 01-29 22:50
  Whales quickly began to short ETH using 25x leverage, accumulating profits of over 80.9 million dollars. At this time, the ETH price rapidly fell from about 2909 dollars to 2844 dollars, a decline of 2.21%.

• 01-29 22:52
  The ETH price fell below the key psychological level of 2900 dollars, further intensifying market panic.

• 01-29 23:17
  Under the effects of successive liquidations and automatic stop-loss mechanisms, the price continued to plummet from 2841 dollars to 2804 dollars, a decline of 1.32%, with a clear lack of support.

• 01-29 23:32
  Current data shows that the ETH price experienced a brief rebound to 2828.01 dollars, but overall it still hovered at low levels, with no obvious signs of market risk recovery.

Reason Analysis 🔍

The severe fluctuations in ETH are mainly due to two internal factors:

1. Macroeconomic and Policy Uncertainty
   The global economic situation is exceptionally complex: U.S. inflation data remains high, Federal Reserve policies are becoming cautious, and there are even rumors of government shutdowns and trade frictions. Safe-haven funds are flowing into traditional precious metals like gold and silver, putting selling pressure on the crypto market as a risk asset, thereby deepening overall market panic.

2. High Leverage Trading and Liquidation Effects
   High leverage trading is prevalent in the crypto market. Recently, whales and some institutions adopted high leverage strategies to short ETH, triggering a systemic chain reaction of liquidations. Technical operations such as automatic stop-loss and position chasing quickly pushed prices to lower levels, exacerbating market selling pressure. Reports about ETH breaking key price levels and whales making profits all confirm that technical liquidations played an important role in this sharp decline.

Technical Analysis 📊

Based on Binance USDT perpetual contract [ETH/USDT] 45-minute candlestick data, this market performance shows significant technical selling pressure:

• Indicator Situation:
• The KDJ indicator is currently in the oversold range, suggesting a potential rebound opportunity in the short term.
• The OBV indicator has fallen below previous lows, indicating that selling power is dominant.
• Volume Performance:
• Trading volume surged by 896.62%, but prices continued to decline, indicating a panic selling phenomenon.
• The total amount of orders in the network reached 10 million dollars in nearly one hour, with long positions accounting for 90%, while the net outflow of main funds was about 30 million dollars, further confirming the dominance of sellers in the market.
• Moving Average Trends:
• The current price is below the MA5, MA10, MA20, MA50, and several EMA moving averages, with the moving averages showing a bearish arrangement, indicating a weak overall trend.
• The RSI indicator is in the oversold area; if market sentiment improves, a technical rebound may occur in the short term, but the overall downward trend remains evident.

Market Outlook 🚀

Currently, Ethereum is in a state of severe volatility, and there are several possible trends for the future:

• If the macroeconomic environment and policy uncertainty persist, coupled with high leverage trading and the chain reaction of liquidations not fully released, ETH may continue to face pressure and further test key support levels.
• On the technical side, oversold indicators suggest that a certain degree of rebound behavior may occur in the short term, but this is limited to a corrective adjustment; the true bottom needs to be confirmed after market sentiment becomes completely clear.
• Investors should pay attention to changes in trading volume and large institutional buy/sell movements, reasonably control positions, and guard against the accumulation of risks caused by market sentiment fluctuations. At the same time, monitor macroeconomic data and policy information to assess the liquidity trends of global risk assets and make cautious trading decisions.

Overall, although the current ETH price shows signs of a brief rebound, under the dual impact of macroeconomic headwinds and leveraged liquidations, the market still exhibits significant technical weakness, and risks remain in the short term. For participants, maintaining rationality, strictly implementing stop-loss measures, and closely monitoring market dynamics will be key to navigating the current situation.

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