Event Review 🔍

Recently, the ETH/USDT market experienced a round of intense volatility. Within just 40 minutes, the price of ETH rapidly surged from around $3728, reaching as high as $3860, before gradually retreating to about $3785. The market saw frequent occurrences of high-leverage liquidations and clearing events, with the institutional whale "7 Siblings" utilizing Aave borrowing funds to strategically position themselves at lower levels, attempting to capture buying opportunities amid the fluctuations. Large fund transfers, flash withdrawals, and liquidation data continuously indicated that the entire market was in a turbulent state of fierce confrontation between bulls and bears.

Timeline 🕒

• 10:00
  The market began to stir, with ETH prices hovering in the $3728–$3732 range. Expectations of macro liquidity easing and high-leverage trading triggered initial liquidations, leading to noticeably unstable market sentiment.

• 10:00–10:40
  ETH rebounded sharply in a short time; although trading volume had not fully recovered, the price quickly soared to between $3848 and $3860, with increases of approximately 3.21% and 3.44%, respectively.

• 10:23
  The institutional whale "7 Siblings" took action, borrowing $5 million from $40 million USDC to purchase 1326 ETH at around $3771, indicating an aggressive bottom-fishing strategy after the significant drop.

• 10:33
  Another piece of information confirmed that institutional positioning was ongoing, with funds continuously entering the market to seize lower prices.

• 10:40
  ETH prices reached a temporary peak, causing a moment of excitement in the market, with volatility peaking.

• 11:10
  After a self-correction in the market, ETH prices fell back to about $3785.35, entering a consolidation phase. Meanwhile, the total amount of liquidations across the network reached $5 million in a short time, with short positions accounting for about 69%, and net inflows of main funds also reaching $90 million.

Reason Analysis 💡

1. Macroeconomic Liquidity Expectations and Policy Uncertainty
   The market has recently had strong expectations that the Federal Reserve may significantly cut interest rates, with the probability of a rate cut exceeding 90% at one point. Coupled with the U.S. government shutdown and external geopolitical and economic frictions, global liquidity has become exceptionally loose and volatile. This expectation has led to a rapid influx of funds into the crypto market, while also increasing short-term liquidity instability.

2. Leverage Trading and Liquidation Effects
   High-leverage operations are frequent, accompanied by numerous liquidation events. In extreme market volatility, stop-loss orders set by traders are triggered due to slippage, leading to rapid liquidations of some positions, further exacerbating price volatility. Multiple large liquidations and on-chain flash withdrawal behaviors in the market also suggest a sudden decrease in liquidity and panic in market sentiment.

3. Institutional Bottom-Fishing and Strategic Positioning
   During significant market fluctuations, institutions are looking for buying opportunities at lower levels. Whales like "7 Siblings" are using leveraged borrowing and fund allocation to attempt to gain a cost advantage amid the wave of liquidations, laying the groundwork for long-term positioning. This counter-cyclical funding behavior reflects institutions' judgment on the medium to long-term value of the market, while also promoting local rebounds during the intense volatility.

Technical Analysis 📊

Based on Binance USDT perpetual contract 45-minute candlestick data, the technical analysis of ETH is as follows:

• RSI and Oversold Signals
  The RSI indicator has recently broken through 30 into the oversold zone, with some technical indicators showing that short-term buying has begun to show signs of recovery, indicating a potential phase of rebound.

• Moving Average Trends Clearly Bearish
  ETH prices are currently below the MA5, MA10, MA20, and MA50 moving averages, with all moving averages showing a clear bearish arrangement. The slope of the mid-term EMA20 is -1.98%, while the long-term EMA120 slope is -0.81%, indicating that the long-term downtrend has not yet ended, and the short-term pullback is more of a technical adjustment.

• Trading Volume and Liquidation Situation
  Current trading volume is only 37.12% of the average level, indicating a decrease in market activity; however, at the same time, mid-term trading volume shows signs of moderate increase, with the 20-day moving average rising by 7.63%, suggesting increased institutional participation. The total amount of liquidations across the network has reached $5 million, with a high proportion of short positions, and frequent liquidation events in a short time further confirm the internal risks of the market's intense volatility.

• KDJ and MACD Signals
  The KDJ indicator shows a divergence between bulls and bears, with some data beginning to diverge, indicating a change in market momentum; the MACD histogram has been continuously increasing, showing that some upward momentum is strengthening, providing potential for subsequent rebounds.

Market Outlook 🔮

In the context of macroeconomic liquidity easing and changing policy expectations, the future trend of ETH may still maintain high volatility. In the short term, although technical signals of an oversold rebound have appeared, the downward pressure indicated by the moving averages still makes it difficult for the pullback to fully transform into a sustained rise. The following points are worth noting:

• Risk Control First
  Due to the frequent occurrence of liquidations and clearing effects, retail investors and small funds should remain cautious and avoid excessive leverage operations. In a highly volatile market, prudent position management is particularly crucial.

• Institutional Attitudes Are Worth Watching
  The low-level positioning of institutional whales indicates their confidence in the medium to long-term value of ETH, but whether they can drive a market reversal still needs to be assessed based on the overall liquidity performance of funds. Observing changes in institutional net inflows and the recovery of trading volume is critical for judging the bottom and future upward momentum.

• Technical Adjustment Signals
  When the RSI gradually rises, trading volume begins to recover, and a clear reversal candlestick pattern appears, it may signal the formation of a phase bottom. Although the current price is below all moving averages, after a short-term rebound, it may continue to explore lower levels, necessitating attention to support levels and changes in trading volume.

Overall, the recent intense volatility of ETH is the result of the internal tug-of-war between bulls and bears, institutional fund positioning, and macro policy expectations. Whether it is the panic triggered by market liquidations or the proactive bottom-fishing strategies of institutions, both provide a rich research sample for the market. For investors, maintaining calm, strict risk management, and closely monitoring technical indicators and macroeconomic dynamics will be important strategies for coping with future intense volatility.

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