Event Review 📉

Recently, the ETH market experienced a sharp fluctuation. Starting from 23:20, the price plummeted from $3705 to $3619 in an instant, a drop of 2.31%. After several rounds of adjustments, it stabilized around $3586.79 at 23:59. Meanwhile, several large holders and high-frequency trading groups triggered stop-loss orders, leading to forced liquidation of 25x leveraged ETH long positions, with a single loss reaching as high as $15 million. The chain reaction of liquidations from high-leverage positions quickly spread, causing market panic and accelerating the risk exposure across the entire ecosystem.

Timeline ⏱️

• 23:08: Federal Reserve officials made statements regarding future interest rate trends, hinting that a rate cut window may gradually open, adding uncertainty to the market.
• 23:20: The ETH market began to plummet, with prices on some platforms dropping sharply from $3705 to $3619, while another platform showed a decrease from $3590 to $3580.
• 23:33: As selling pressure intensified, "high win-rate whales" began to gradually reduce their positions, triggering stop-loss orders on some ETH long positions.
• 23:38: The "Maji Brother" 25x leveraged ETH long position was completely liquidated, resulting in a single loss of up to $15 million, triggering a chain reaction of liquidations.
• 23:49: The ETH price continued to adjust and hovered around $3580, with market sentiment becoming cautious.
• 23:59: After the violent fluctuations, ETH slightly stabilized at $3586.79, showing signs of market stabilization.

Reason Analysis 🔍

1. High Leverage Positions and Chain Liquidations
   A large number of long positions using leveraged trading in the market quickly hit stop-loss lines during the price correction, leading to forced liquidations. A single liquidation event often triggers a chain reaction of capital, creating a magnifying effect that plunges the entire market into a selling frenzy.

2. Macroeconomic Policy Changes and Risk Aversion
   The statements from Federal Reserve officials regarding future interest rate trends intensified the market's risk-averse atmosphere. Under the dual impact of weakening liquidity expectations and geopolitical risks, investors generally tended to reduce their positions, exacerbating market selling pressure.

Technical Analysis 📊

Based on the 45-minute K-line data of Binance USDT perpetual contracts, the current technical indicators show:

• Oversold Condition: The J value is in the extreme oversold area, and the RSI also shows a signal of a potential reversal from oversold, increasing the likelihood of a short-term rebound, although the rebound may be limited.
• Moving Average Arrangement: The price is below MA5, MA10, MA20, and MA50, while EMA5/10/20/50/120 all show a bearish arrangement, indicating a weak overall trend.
• Surge in Trading Volume: Recent trading volume has increased by nearly 89.39%, and the trading volume to price ratio is above the average level, indicating that transactions at this price point are unusually active.
• Momentum Indicators: OBV has broken below previous lows, indicating that selling pressure has increased, while the divergence in the KDJ indicator suggests that short-term market fluctuations may be severe.
  Overall, although the technical indicators show oversold conditions with some potential for a rebound in the short term, the rapid downward trend and chain liquidations caused by high leverage have not changed the overall bearish pattern in the market.

Market Outlook 🔮

In the current environment, the future direction of ETH has several key points of focus:

• Short-term Fluctuation and Rebound Possibility: The oversold condition provides a technical rebound signal, but caution is needed regarding the risk of continued capital outflow; short-term rebounds may be limited by ongoing liquidation pressure.
• Medium to Long-term Trend Remains Weak: In a high-leverage trading environment, uncertainty still exists. If macroeconomic policies and liquidity risks persist, the price is likely to hover around $3600 or lower.
• Risk Control and Position Management: Investors should pay more attention to risk control, strictly set stop-loss orders, and guard against deep fluctuations caused by chain liquidations in a volatile market environment.
• Policy Signal Monitoring: Future attention should be paid to policy changes from the Federal Reserve and other institutions, as well as relevant macroeconomic indicators, which will have a key impact on market liquidity and risk appetite.

Summary 📝

The recent violent fluctuations in ETH have fully exposed the significant risks lurking in the crypto market under the dual inducements of high leverage and macroeconomic policies. Although technical indicators suggest a potential oversold rebound in the short term, the overall downward trend has not fundamentally changed. For a wide range of investors, strengthening risk management and position control, as well as monitoring policy dynamics and changes in market sentiment, are the best strategies to cope with a volatile environment.

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