Event Review 📉

Recently, ETH experienced significant volatility in trading, with the price plummeting from $2039 to $1997 in an instant, a drop of over 2%. This series of movements was primarily due to the loss of technical support levels and the triggering of stop-loss orders by institutional positions, leading to an automatic sell-off chain reaction in the market. Meanwhile, the ongoing uncertainty regarding macro policies and regulatory developments has also impacted investor confidence, further intensifying risk-averse sentiment.

Timeline ⏱️

• 14:40
  The ETH price hovered around $2039, at which point indicators such as the lower Bollinger Band and MVRV Z-Score showed that the market was entering the "surrender zone," triggering automatic stop-loss orders and forcing the liquidation of institutional positions.

• 14:40 - 14:52
  The price plummeted from $2039 to $1997 in just 12 minutes, a decline of 2.07%, with the technical trigger effect rapidly spreading.

• 14:51 - 14:52
  Media and market monitoring systems began to report significant signals that ETH had fallen below the $2000 mark, further exacerbating market panic.

• 14:40 to 15:15
  Another set of data recorded a slight decline in price from $2002 to $1996; although the drop was only 0.29%, it reflected the burden of continuous stop-losses and profit-taking on the market.

• 15:21
  The latest data indicated that the ETH price rebounded to $2011.38; although there were signs of a brief rebound, the overall market still faced significant downward pressure.

Reason Analysis 🔍

Technical Triggers and Institutional Stop-Loss Effects

• After ETH broke below the key support level of $2000, indicators like the MVRV Z-Score quickly entered extreme territory, triggering a large number of automatic stop-loss orders and forcing the liquidation of leveraged positions. Institutions and whales rushed to sell ETH on exchanges amid this extreme volatility, exacerbating the price decline.

Uncertainty in Macro Policies and Increased Risk-Averse Sentiment

• Frequent global regulatory movements, policy signals from the Federal Reserve and the European Central Bank, along with revisions to employment data, combined with increased regulation of virtual currencies in some countries, have raised market risk expectations. Funds have flowed out of high-risk assets and into safe-haven assets, putting additional pressure on digital assets like ETH.

Technical Analysis 🔧

Based on Binance USDT perpetual contract 45-minute candlestick data, the current technical performance is as follows:

• Price and Bollinger Band Dynamics
  ETH is operating along the lower Bollinger Band, indicating a weak trend in the short term.

• Abnormal Oscillation Indicators
  The KDJ indicator has entered the oversold area, with the J value at an extremely low level, suggesting a potential short-term rebound; however, this rebound is more corrective than trend-driven.

• Surge in Trading Volume
  Although trading volume has surged by 361.66% compared to previous periods, the spike in volume alongside the price drop forms a typical panic selling signal, with current trading volume far exceeding the 10-day average, indicating an unusually active and pessimistic market sentiment.

• Death Cross of Moving Averages and Destruction of Bullish Arrangement
  The EMA24 has crossed below the EMA52, forming a death cross, while the MA5, MA10, and MA20 are all in a bearish arrangement, and the MACD histogram continues to decrease, all indicating bearish signals in the medium to long term.

• Continuous Decline in OBV Indicator
  The OBV indicator continues to break below previous lows, indicating strong selling pressure and significant market selling pressure.

Market Outlook 🚀

Despite ETH's price rebounding to $2011.38 at 15:21, considering that multiple technical indicators remain bearish and macro uncertainty continues to impact the market, the outlook is as follows:

• Short-term Risks Remain Severe
  If the effects of automatic stop-losses and the liquidation of institutional positions continue to unfold, the market may face a new round of adjustments, with prices likely to continue fluctuating at low levels in the short term.

• Unclear Flow of Risk-Averse Funds
  The uncertainty in global regulations and policies will sustain risk-averse sentiment, and investors need to be wary of downside risks, as the pressure of funds flowing out of high-risk assets still exists in the short term.

• Bottom Fluctuations May Foster Rebound Opportunities
  In the long term, once market sentiment stabilizes and technical indicators show signs of oversold recovery, ETH may initiate a rebound after a period of fluctuation at low levels. However, this process requires time for validation, and it is advisable for investors to remain cautious and closely monitor key support levels and changes in trading volume.

Overall, ETH is currently under the dual influence of technical adjustments and macro policy pressures. The future trend will depend on the market's ability to restore sentiment and the further positioning of institutional funds. A rational, cautious approach while seeking opportunities to enter at lower levels may be a wise choice for investors to navigate the current market volatility.

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