Event Review ⏱️

Recently, the ETH market experienced severe fluctuations, and the market suddenly fell into a panic atmosphere. Since the market opened at 10:30, the ETH price has been plummeting, experiencing multiple sharp declines in a short period, triggering a large number of forced liquidations and liquidation effects due to high leverage positions. According to monitoring data, at 10:30, the ETH price hovered between $2292 and $2297, and soon after, it rapidly dropped, falling from about $2297 to $2223 within 46 minutes, a decrease of 3.26%. Subsequently, over the course of an hour, the price further slid to $2163, with a cumulative drop of over 5.6%. By 11:45, the market saw a brief rebound, with ETH rising to $2196.56, but the overall low-level fluctuations and clear downward trend still cast a thick layer of pessimism over the market.

Timeline 🕒

• 10:30: The market opened, with the ETH price hovering between $2292 and $2297, showing initial signs of volatility.
• 10:30 to 11:16: In just 46 minutes, the price plummeted from $2297 to $2223, highlighting the fragility brought by high leverage trading.
• 10:30 to 11:30: The price further dipped, sliding from about $2292 to $2163, with a cumulative drop of 5.62%.
• 11:21: The key support level of $2200 was breached, with the trading price dropping to about $2199.51.
• 11:45: Some funds began to stabilize the market, with the ETH price slightly rebounding to $2196.56.

Reason Analysis 🔍

The main reasons behind this ETH crash are as follows:

• High Leverage Position Effect: Some institutions and whales adopted high leverage trading strategies, concentrating their positions in low price ranges. Once the price reached the preset liquidation range (e.g., $1781 to $1862), it triggered large-scale forced liquidations, leading to a chain of sell-offs.
• Liquidation and Forced Clearing: Data shows that the total liquidation amount across the network reached $10 million within the last hour, with long positions accounting for 92% of the transactions, and net outflow of about $40 million from major funds, indicating a sharp decline in market sentiment.
• Macroeconomic and Geopolitical Influences: Recent deadlock in U.S. government funding bill negotiations, partial government shutdowns, and geopolitical tensions between the U.S. and Iran have all exacerbated market uncertainty. Controversies over Federal Reserve nominations and fluctuations in the dollar have further suppressed market risk appetite.

Technical Analysis 📊

This technical analysis is based on the [ETH/USDT Binance USDT perpetual 45-minute] candlestick data, with the main technical indicators as follows:

• Price and Bollinger Bands: The current price is running along the lower Bollinger Band, showing signs of being oversold; the J value is extremely oversold, suggesting a potential technical rebound in the short term.
• Trading Volume: The trading volume increased by 22.03% in the last hour, with the 10-day average volume rising by 23.47% and the 20-day average volume increasing by 15.33%, indicating a significant enhancement in market activity.
• Moving Average System:
• The price is currently below MA5, MA10, MA20, and MA50, with the moving averages showing a bearish arrangement, confirming the overall bearish trend.
• The EMA series (5/10/20/50/120) are all above the price and exhibit a perfect bearish arrangement. Among them, the EMA20 slope is -1.55%, and the EMA120 slope is -0.86%, both reflecting strong downward momentum.
• MACD and RSI Indicators:
• The MACD histogram continues to decrease, further indicating that the downward momentum is accelerating.
• The RSI is in the oversold area, suggesting a potential rebound in the short term, but overall market sentiment remains pessimistic.
• Other Technical Signals: Some candlestick patterns are showing engulfing patterns and TD price reversal signals, which may indicate opportunities for short-term technical reversals, but the overall long-term trend still looks bearish.

Market Outlook 🚀

Looking ahead, the ETH market remains full of uncertainty:

• Short-term Trend: Technical indicators show that the price is nearing the oversold area, and there may be a certain degree of rebound in the short term. However, this rebound may only be a technical adjustment, with limited buying strength, and the market will still face significant downward pressure.
• Medium to Long-term Risks: The chain liquidation effect caused by high leverage positions, macroeconomic uncertainties, and geopolitical risks may lead to further price corrections. Investors should continue to monitor the performance of key support levels (such as around $2200) and exercise caution with stop-losses.
• Risk Warning: In the current volatile market, it is recommended that investors reduce their positions, implement risk control, and closely monitor short-term trading data and large transaction dynamics to prevent triggering large-scale liquidations again.

Overall, this round of ETH crash reflects the surge in inherent risks of high leverage trading in the market and also reflects the combined pressures from macroeconomic and geopolitical factors. In the face of volatile market conditions, investors need to remain calm, closely track changes in technical and fundamental factors, and carefully formulate trading strategies to better protect asset safety in this storm.

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