📌 Event Review

Recently, the Ethereum market has experienced significant price volatility. As early as around 03:00, the price of ETH hovered around $4576. Subsequently, the market triggered stop-losses and liquidations due to high leverage positions, creating a chain reaction of liquidations that caused the price to plummet rapidly in a short period. Several key support levels were breached, dropping from $4500 to below $4400, leading to panic selling. Although there was a brief stabilization at 04:25, with the ETH price rising to about $4415, the overall volatility remained evident, and market sentiment continued to be tense.

⏰ Timeline

• 03:00: The market opened, observing ETH prices around $4576.
• 03:00～03:56: Triggered by stop-losses and liquidations of high-leverage long positions, the price plummeted from $4576 to $4428, a decrease of about 3.24%.
• 03:31: The market showed ETH breaking below the key support of $4500, with initial signs of panic emerging.
• 03:37～03:39: Multiple monitoring messages confirmed the price fell below $4500, further intensifying risk-averse sentiment.
• 03:00～04:10: Comprehensive data showed ETH prices declined from about $4573 to $4376, with a cumulative drop of 4.30%, breaching the $4400 mark.
• 04:10: Reports indicated that the low for ETH had reached around $4376, with panic selling and technical stop-loss effects fully fermenting.
• 04:25: The market saw a brief rebound, with ETH prices rising to about $4415, but overall fluctuations remained significant.

🔍 Cause Analysis

The severe volatility of ETH this time was mainly driven by the following two factors:

1. Technical Stop-Loss and Liquidation

• A large number of high-leverage positions triggered stop-losses when key support levels were hit, creating a chain reaction of liquidations. This technical stop-loss not only accelerated the price decline but also triggered widespread panic selling, causing the price to spiral out of control.

1. Macroeconomic Expectations and Liquidity Risks

• The Federal Reserve's repeated liquidity adjustments and interest rate cut expectations, along with some officials' statements about using standing repurchase agreements to alleviate liquidity pressure, have lowered market risk appetite.
• At the same time, slowing economic growth expectations and related regulatory news have collectively heightened market uncertainty, exacerbating risk-averse sentiment and further contributing to the severe volatility of digital asset prices like ETH.

⚙️ Technical Analysis

Based on Binance's USDT perpetual contract 45-minute candlestick data, a technical interpretation of ETH's recent trend is as follows:

• The price is currently running along the lower Bollinger Band, showing a clear weak trend.
• The KDJ indicator is in the oversold area and shows signs of convergence, indicating a potential technical rebound in the short term, but overall bullish strength is insufficient.
• The moving averages (MA5, MA10, MA20, MA50) are all in a bearish arrangement, with prices consistently below these moving averages, indicating that the downtrend remains solid.
• The exponential moving averages (EMA5/10/20/50/120) are also all arranged at low levels, especially with EMA20 showing a steep slope (about -1.22%), indicating strong downward momentum.
• The MACD histogram shows a continuous decrease, further confirming that the downward momentum is weakening but still overall downward.
• Trading volume data shows a significant increase compared to the 10-day and 20-day moving averages, indicating enhanced market activity, but mainly used to accelerate short selling and stop-loss liquidations.
• The total liquidation amount across the network reached tens of millions of dollars within the last hour, with long positions accounting for as much as 96%, and this liquidation effect accelerated the chain decline in prices.

🔮 Market Outlook

Although ETH is currently in a relatively oversold state, some technical indicators (such as RSI and TD price reversal) suggest the possibility of a short-term rebound, the overall market backdrop remains fraught with downside risks. Future trends need to focus on the following points:

• If ETH can stabilize in the current support range, buying interest may lead to a technical rebound;
• Conversely, if the price breaks below key support, especially in the $4400 area and below, it may trigger further liquidations and chain liquidations, significantly amplifying market risks;
• At the same time, changes in macroeconomic policies and liquidity adjustments will continue to have a significant impact on market sentiment, and investors should remain cautious.

Overall, the current ETH market is still in a phase of technical adjustment intertwined with market sentiment fluctuations. It is recommended that investors closely monitor changes in key technical levels, reasonably allocate positions, and prepare for risk control to cope with potential severe fluctuations.

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