Event Review 📜

Recently, the ETH market experienced significant volatility, with market sentiment, on-chain operations, and technical indicators intertwining to drive substantial price fluctuations in the short term. As early as 02:30, a large limit order exceeding $14.43 million appeared on the Binance ETH/USDT order book, holding firm around the $2100 mark for nearly two and a half hours, indicating the strategic positioning of major players at this price level. At 02:44, the U.S. House of Representatives voted to pass a funding bill, ending part of the government shutdown, which suddenly alleviated political uncertainty and injected a strong dose of confidence into the market. Subsequently, starting at 03:00, the ETH price began to rise from around $2111, quickly climbing under the dual influence of favorable market conditions and restored liquidity. In the following period, the price continued to surge, and on-chain data showed that wallets associated with Trend Research and "BTC OG insider whales" had deposited a total of 310,000 ETH into exchanges over the past three days to repay loans, reflecting the chain reaction of high-leverage position liquidations. This series of events intertwined to drive strong fluctuations in the short-term ETH market.

Timeline ⏰

• 02:30: A limit order exceeding $14.43 million appeared on the Binance ETH/USDT order book, with the order price around $2100, indicating strategic intervention by major players in this range.
• 02:44: The U.S. House of Representatives voted to pass a funding bill, ending part of the government shutdown, alleviating policy uncertainty and significantly cooling panic sentiment.
• 03:00: Influenced by favorable policy and improved liquidity, the ETH price began to rise in the range of $2111 to $2119.
• 03:31: In just 31 minutes, the ETH price surged from $2111 to $2219, an increase of about 5.10%, with market sentiment rapidly warming.
• 03:33: On-chain data showed that wallets related to major players had deposited a total of 310,000 ETH (approximately $651 million) into Binance over the past three days, indicating that some positions were hurriedly repaying debts to avoid liquidation.
• 04:30: The ETH price continued to rise, accumulating to a peak of $2354 since 03:00 (an increase of about 11.09%), before retracing to $2323.09, with the overall volatility being the result of multiple factors working together.

Reason Analysis 🔍

The recent volatility in the ETH market can be attributed to two core reasons:

1. Market Sentiment Reversal Due to Policy Breakthrough
   The U.S. House of Representatives passed a funding bill to end part of the government shutdown, significantly alleviating political uncertainty and quickly releasing positive signals for capital inflow. In a market environment that had been under pressure due to a policy deadlock, this move immediately activated investor confidence, leading to a surge of funds into the digital asset sector and driving a short-term rebound in ETH prices.

2. Increased Leverage Risk and Liquidity Changes Triggering a Chain Reaction of Liquidations
   On-chain data indicated that some high-leverage positions were forced to liquidate due to insufficient market liquidity, combined with large limit orders and frequent liquidations (with approximately $4 million in liquidations across the network within an hour, of which 71% were short positions), causing a brief rebound as the market approached technical support. This liquidity upheaval triggered by forced liquidations of leveraged positions exacerbated the sharp fluctuations in ETH prices.

Technical Analysis 📊

This technical analysis is based on Binance USDT perpetual contract 45-minute candlestick data, interpreting the ETH/USDT trading pair, with key indicators including:

• RSI and Bollinger Bands: The RSI broke above the 50 midline, indicating strengthened upward momentum; simultaneously, the price crossed above the middle band of the Bollinger Bands, presenting a bullish signal.
• Candlestick Patterns and Volume Analysis: A "red three soldiers" pattern emerged, with short-term bulls exerting continuous force; trading volume surged by 157.39%, and the current trading volume is at the top 10% level of the last 10 periods, indicating active buying but also accompanied by some overbought risk.
• Moving Average Arrangement: Short-term moving averages (MA5, MA10, MA20) are in a bearish arrangement, suggesting that some selling pressure still exists in the short term; the mid-term bullish support is near MA50, but the EMA120 and EMA24/EMA52 moving averages are trending downward, indicating a continued weak long-term trend.
• Other Indicators: The OBV crossing above its moving average further confirmed the buying signal; the TD Sequential is in a bullish Setup phase, but some counts were canceled afterward, also indicating potential pullback risks in the short term.

Overall, although short-term technical indicators show strong buying pressure and robust market momentum, the overbought conditions and the downward trend of long-term moving averages suggest that investors should remain vigilant about pullback risks.

Market Outlook 🚀

The future direction of the market still carries significant uncertainty. In the short term, favorable policy news and improved liquidity are expected to continue supporting a rebound in ETH prices. If funds continue to flow in, ETH may further test higher price levels. However, the liquidation risks caused by high-leverage positions and overbought technical indicators also pose potential pullback risks. Investors should closely monitor the dynamics of large on-chain orders and overall spot trading volume changes, while also paying attention to the further performance of technical indicators such as moving averages, RSI, and TD Sequential.

In summary, the current ETH market can be seen as a situation where sentiment and risk coexist. The market is transitioning from being activated by policy sentiment to a game of high-leverage liquidation risks. It is advisable for investors to remain cautious, consider reducing positions at highs or gradually accumulating, to avoid unnecessary losses due to short-term volatility, while closely monitoring global macro policies and capital movements to prepare for subsequent market developments.

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