🎯 Event Review

Recently, the market has experienced severe fluctuations, with the price of ETH undergoing a rapid decline and a brief rebound within just a few minutes. Macroeconomic reports indicate a drop in the value of the US dollar, coupled with escalating geopolitical risks in the Middle East, frequent news regarding tensions between Iran and Israel, and uncertainties in policy signals, all contributing to a sharp downturn in market sentiment. Meanwhile, internal disagreements within the Fed regarding the timing of interest rate cuts have heightened expectations of potential future liquidity constraints, intensifying investors' risk-averse sentiment. Both bulls and bears are engaged in a fierce tug-of-war between panic selling and short-term arbitrage, leading to significant volatility in ETH prices.

⏰ Timeline

• 00:00 – The Federal Reserve report is released, showing a general decline in the value of the US dollar, creating an atmosphere of reduced liquidity and lower risk appetite across the market.
• 00:13 – A senior Israeli military official issues a statement emphasizing the need to prepare for a prolonged conflict with Iran, significantly escalating geopolitical risks in the Middle East.
• 00:16 – Policy news emerges indicating that Trump has softened his stance on Iran, but the uncertainty of this signal makes the market more fragile.
• 00:25 – Federal Reserve officials state that current data does not necessitate an urgent interest rate cut, exacerbating market concerns about future monetary policy and liquidity conditions.
• 00:30 – ETH experiences a rapid decline, dropping from approximately $2490 to $2405, with a single-stage drop of 3.42%.
• 01:35 – ETH prices continue to fall, dropping from $2484 to $2364, with a cumulative decline of about 4.85%, reaching a peak of market volatility.
• 01:55 – After a period of intense fluctuations, ETH rebounds, with the latest data reporting $2401.12, as both bulls and bears begin to seek a new balance.

🔍 Reason Analysis

1. Escalation of Geopolitical Risks
   The tense situation in the Middle East, particularly the verbal friction and military preparations between Iran and Israel, has deterred global investors from risk assets. Concurrently, many institutional investors have begun to adjust their positions to avoid potential external shocks, resulting in significant selling pressure on crypto assets like ETH.

2. Uncertainty in Macroeconomic and Policy Expectations
   Disagreements within the Federal Reserve regarding future policies and recent signals of declining liquidity have led investors to question their overall market risk exposure. Uncertainties surrounding tariffs, economic data, and the timing of interest rate cuts are continuously increasing market volatility, prompting a rush of short-term funds to exit.

📊 Technical Analysis

This technical analysis is based on Binance USDT perpetual contract 45-minute candlestick data, focusing on the ETH/USDT trading pair:

• Oversold Indicator: RSI has fallen below 30, entering the oversold zone, indicating that short-term buying may have a chance for recovery.
• Bollinger Band Analysis: The price has broken through the lower Bollinger Band and is running along the lower band, indicating that the market is under strong selling pressure, with clear oversold conditions.
• Moving Average System: MA5, MA10, and MA20 are all in a bearish arrangement, with all short- to medium-term moving averages positioned above the price, confirming a strong downward trend in the short term.
• Volume Expansion: Trading volume surged by 576.04%, but accompanied by a price decline, indicating severe panic selling in the market. Additionally, within the last hour, the total network liquidation reached $30 million, with a net outflow of $30 million from major funds, showing strong selling power.
• Candlestick Patterns: The continuous appearance of the "three black crows" pattern and KDJ death cross further confirms the short-term bearish signals in the market.

🔮 Market Outlook

After a series of intense fluctuations, the price of ETH is currently in an adjustment phase, showing signs that both bulls and bears are re-engaging in a contest. From a technical perspective, the RSI is in the oversold zone, but the turning point has not yet become apparent. Some institutions may take advantage of the low levels to accumulate positions in batches, driving a short-term rebound. However, under the overall bearish arrangement and significant selling pressure, if it fails to effectively hold the key support level (around $2360), it may continue to decline.

Future trends will still be influenced by several factors:

• Global Macroeconomic Conditions and Federal Reserve Policy Direction: If future data from the Federal Reserve surprises or if additional liquidity interventions occur, market sentiment may shift rapidly.
• Further Evolution of Geopolitical Risks: If tensions in the Middle East persist or new major conflicts arise, market panic may fuel demand for safe-haven assets, dragging down ETH's performance.
• Technical Support and Rebound Signals: Oversold indicators suggest a potential short-term rebound, but overall volatility is unlikely to completely end, and investors need to closely monitor key moving averages and support levels.

In summary, after experiencing sudden and significant fluctuations, the forces of bulls and bears have not yet fully confronted each other. A period of consolidation is expected in the short term. It is advisable for investors to remain cautious, paying attention to changes in liquidity, trading volume, and the latest developments in relevant policies and geopolitical situations, and to flexibly adjust positions to respond to future uncertainties.

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