Event Review 🔍

Recently, the ETH market experienced a round of intense price fluctuations, quickly opening a gap from the morning high and triggering a chain liquidation near key support levels. The entire process was filled with the shadows of stop-loss orders and technical corrections. The market plummeted sharply from its peak in a short time, forcing some long positions to close, accompanied by an abnormal increase in trading volume and multiple technical indicators signaling bearish trends. Investors continuously adjusted their positions in panic, and market sentiment showed a clear cautious and sluggish state.

Timeline ⏰

• 07:10: Market volatility begins. ETH price plummets from about $2135 to $2086, a drop of approximately 2.30% within 15 minutes.
• 07:12: Analysts point out that although ETH's price is above EMA24 on the 4-hour chart, it is below EMA52. Coupled with a sharp decline in trading volume and KDJ death cross and overbought signals, the importance of the key support level at 2063.5 USDT is highlighted.
• 07:37: The price continues to dip to about $2070, triggering some long stop-losses, which enhances the chain liquidation effect and increases the market's downward momentum.
• 07:53: After a brief adjustment, the market stabilizes, with ETH's latest transaction price rebounding to about $2094.63, indicating that the market is beginning to attempt a recovery and re-establish support after the fluctuations.

Reason Analysis 💡

The market's sharp fluctuations are mainly driven by two factors:

1. Technical Correction and Insufficient Liquidity
   At the critical moving average range, ETH faces weak technical support. When the price reaches the resistance/support level of 2063.5 USDT, long stop-losses and algorithmic trading quickly activate. Coupled with insufficient liquidity, the price experiences a rapid adjustment, amplifying the correction.

2. Macroeconomic Policy Uncertainty and Institutional Fund Adjustments
   Global policy dynamics are complex, especially the impact of signals from the Federal Reserve and European and American central banks on overall market risk appetite. At the same time, news of institutional fund reallocations, stop-loss liquidations, and capital outflows collectively conveys a rising market risk-averse sentiment, increasing downward pressure on prices.

Technical Analysis 📉

Based on the 45-minute candlestick data of Binance ETH/USDT perpetual contracts, the market's technical aspects exhibit the following characteristics:

• Moving Average System: EMA5 crosses below EMA10, forming a death cross, while MA5, MA10, and MA20 are in a bearish arrangement, with prices encountering resistance near MA20. However, the price finds some support at MA50, showing a moderate signal in the medium term.
• Momentum Indicators: RSI falls below the 50 midline, indicating increased downward momentum; the KDJ indicator shows a death cross and is in the overbought area, suggesting significant short-term correction risks.
• Bollinger Bands and OBV Performance: The price crosses below the middle band of the Bollinger Bands, and the OBV indicator shifts from positive to negative, further confirming the sell signal.
• Volume Changes: Trading volume surges by 185.22%, but during the price adjustment, it amplifies the effects of panic selling, indicating a fragmented liquidity situation in the market.

Additionally, from the 4-hour chart perspective, although the current ETH price remains above EMA24, it is below EMA52, indicating that the forces of bulls and bears are in a tug-of-war, with adjustment pressure still present in the short term.

Market Outlook 🚀

In the short term, ETH may continue to oscillate at low levels. If the price can form effective support at 2063.5 USDT, panic selling may ease, potentially leading to a stabilization rebound; however, if the support is broken, the market may face a new wave of selling, further lowering prices. At the same time, global macroeconomic and policy uncertainties will continue to impact market sentiment.

For investors, it is advisable to maintain a cautious attitude and closely monitor key support and changes in technical indicators. Short-term operations should guard against liquidity risks and avoid high-leverage operations; long-term investors may look for structural buying opportunities but must prepare for risk control to cope with potential sharp fluctuations. The market is currently in an adjustment phase, and rational judgment and risk management will be key to future operations.

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