Event Review 📈

On June 18, 2025, ETH experienced significant volatility within just one hour. At 02:30, ETH was priced at $2464. Subsequently, boosted by the U.S. May CPI being lower than expected and a gradual increase in core interest rates, along with a large number of 25x leveraged short positions being forced to close, buying pressure was quickly released, driving the ETH price sharply upward. At 03:45, the price reached as high as $2543, before adjusting to $2540.81 at 03:50, showing signs of a brief profit-taking.

Timeline ⏰

• 02:30: ETH price reported at $2464. The U.S. May CPI (annual rate of 2.4%) and a core interest rate increase of only 0.1% changed market expectations, while high-leverage shorts faced the risk of being forced to close, leading to a shift in market sentiment.
• 03:45: Within approximately 1 hour and 15 minutes, ETH price rapidly rose to $2543, with a cumulative increase of about 3.20%.
• 03:50: After a brief adjustment, ETH price stabilized at $2540.81, with some profit-taking occurring, and market sentiment began to stabilize.

Reason Analysis 🔍

• Favorable Macroeconomic Data
  The U.S. May CPI data was lower than expected, and the limited movement in core interest rates led the market to anticipate interest rate cuts and improved liquidity, boosting risk assets.

• Forced Liquidation of Leveraged Positions
  A large number of ETH short positions established with 25x leverage (opening price of $2780, liquidation price of $2948) were forced to close at a critical moment, resulting in a short squeeze that accelerated the release of buying pressure.

Technical Analysis 📊

This technical analysis is based on the 45-minute candlestick chart of the ETH/USDT perpetual contract on Binance, revealing subtle changes in market sentiment through various indicators:

• Bollinger Band Midline: The price crossed above the Bollinger Band midline, signaling a bullish indication.
• KDJ Indicator: The indicator showed divergence, indicating an increase in upward momentum.
• OBV Indicator: OBV has crossed above its moving average, suggesting that buying power is strengthening.
• Volume Changes: Overall trading volume decreased by 30.62%, indicating a temporary reduction in market activity, but short-term and medium-term moving averages (10-day, 20-day) saw volume increase by 17.51% and 8.95%, respectively, suggesting a recovery in local trading activity.
• Candlestick Patterns: The chart displayed more than three consecutive bullish candles (red three soldiers pattern), conveying a short-term bullish signal.
• Moving Average Arrangement: Although MA5, MA10, and MA20 are in a bearish arrangement, the price is currently below the EMA120 moving average, indicating a long-term bearish outlook, but in the short term, the price is above the EMA24, suggesting a possible rebound within a downtrend.

Overall, technical indicators show that buying power is strengthening, but the moving average configuration still indicates some profit-taking pressure, with short-term fluctuations coexisting with a medium to long-term downward trend.

Market Outlook 🌟

Considering both macroeconomic and technical factors, the future trend of ETH is full of uncertainties:

• Short-term Volatility: With current buying pressure, there may be continued upward momentum in the short term, but profit-taking and declining trading volume suggest that some investors may reduce positions at highs, leading to noticeable fluctuations in market sentiment.
• Macroeconomic Support: If U.S. economic data continues to perform moderately, along with improved liquidity expectations, it will provide long-term support for ETH and other risk assets. However, the risk of high-leverage short positions still needs attention; if the market adjusts again, it may trigger a new round of short squeezes.
• Risk Warning: Investors should closely monitor further economic data and changes in trading volume, maintain cautious operations, adjust positions in a timely manner, and manage risks appropriately. For investors who are optimistic about the fundamentals and technical structure in the long term, it may be a good time to accumulate at lower prices, but short-term volatility could pose significant trading risks.

In summary, this wave of intense volatility in ETH reflects the market's response to a combination of macroeconomic data, the release of leveraged positions, and technical signals. Investors should capture short-term opportunities while remaining vigilant about medium to long-term trends.

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