Event Review 📉

In the early hours of November 5, the ETH market experienced a severe fluctuation. Initially, a large amount of negative news erupted in the market, leading to massive liquidations in the contract market—within nearly an hour, the total liquidation amount across the network reached $103 million, with ETH liquidations amounting to $29.53 million, and a very high proportion of long positions being liquidated. At the same time, the U.S. Senate failed to pass a temporary funding bill, exacerbating concerns about the possibility of the U.S. government shutdown exceeding the historical record of 35 days. This series of events quickly ignited market risk-averse sentiment, triggering a wave of sharp sell-offs.

Timeline 🕒

• 01:31 – A concentration of negative news in the market leads to a massive liquidation event; U.S. political uncertainty intensifies risk-averse sentiment.
• 02:00 – ETH price begins to plummet rapidly from around $3,373, with the chain liquidation effect starting to show.
• 02:32 – ETH breaks below the key support level of $3,300, with technical defenses breached, triggering more stop-loss liquidation actions.
• 02:35 – According to trading data, ETH price drops to about $3,255, with a cumulative decline of 3.46%, indicating that market panic continues to spread.
• 03:00 – Although the market sees some rebound after the sharp sell-off, with ETH price rising to $3,305.67, overall volatility remains high, and investor sentiment has not fully recovered.

Reason Analysis 🔍

The market fluctuation was mainly influenced by two factors:

1. Macroeconomic Policy and Political Uncertainty
   The U.S. government has been caught in a continuous shutdown crisis, with the latest news indicating that the funding bill is stalled and may lead to a new record for the number of shutdown days. The political uncertainty drives global funds towards low-risk assets, reducing liquidity in the cryptocurrency market, thereby exerting strong downward pressure on the market.

2. High-Leverage Positions Triggering Chain Liquidations
   Some traders in the market used high-leverage strategies, and when prices fell, stop-loss and liquidation orders appeared one after another. The rapid liquidation of long positions and the chain effect further amplified price volatility, causing market sentiment to plummet sharply in a short period, accelerating the sell-off behavior.

Technical Analysis 📊

Based on the 45-minute K-line data of Binance USDT perpetual contracts, the technical aspects of ETH/USDT are observed:

• Price Trend and Moving Average Arrangement
  The current price is running along the lower Bollinger Band and is below the MA5, MA10, MA20, MA50, and EMA series (EMA5/10/20/50/120) moving averages, showing a clear bearish arrangement, indicating a strong downward trend. The slopes of EMA20 and EMA120 are -1.83% and -0.65%, respectively, further proving that the medium to long-term downward momentum should not be underestimated.

• Indicator Signals
  Although the KDJ indicator has issued a golden cross signal and is in the oversold area, suggesting a possible short-term rebound, the OBV indicator has fallen below previous lows, indicating that selling pressure remains strong. The MACD histogram continues to shrink, and the RSI is in the oversold zone, suggesting that the market may stabilize briefly after the sharp sell-off, but the overall momentum has not fully reversed.

• Trading Volume Situation
  Trading volume has significantly increased (up 53.53% compared to usual), with the 10-day and 20-day average volumes rising by 96.62% and 50.98%, respectively, indicating that both retail and institutional trading activity is unusually high, with market sentiment fluctuating violently, and a tug-of-war situation may occur in the short term.

Market Outlook 🔮

In the short term, although the oversold signals in technical indicators may provide some stabilization and rebound opportunities for ETH, the macro environment and the chain liquidation effect from high leverage will continue to exert downward pressure on the market. If the U.S. government shutdown persists, risk-averse sentiment may deepen, further constraining market liquidity, and the rebound potential for ETH prices will be limited. Investors are advised to remain cautious, monitor key support levels (such as $3,300 and lower technical supports), and reasonably allocate positions to guard against potential risks.

In the medium to long term, the repair of the market's fundamentals will require waiting for macro policies to gradually clarify and for investor risk appetite to recover. If the technical aspects can gain substantial support at key support levels, a trend reversal may be possible, but current volatility remains extremely high, and future market movements are still full of uncertainty.

Overall, this round of market fluctuations reflects the oscillation of market sentiment between the shadows of macro policies and high leverage risks. Investors need to maintain clear judgment amid the turbulence, closely monitor changes in market liquidity and technical signals, and implement effective risk control.

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