Event Review 💡

Last night around 23:30, the price of ETH began to show significant volatility. From a high point of about $1977, it rapidly fell to $1912 within just 51 minutes, marking a drop of 3.28%. Another set of data indicated that between 23:30 and 00:30, the price fell from $1973 to $1894, with a decline of 4.01%. Following this, the market experienced a partial rebound, with the ETH price rising to $1911.63 by 00:50. Overall, this wave of intense volatility erupted under the dual influence of signs of weak global macroeconomic conditions and high-leverage trading triggering a chain liquidation, fully reflecting the sensitive reaction of the digital asset market under the dual pressures of risk aversion and position risk.

Timeline ⏰

• 23:30
  The price of ETH hovered between $1973 and $1977, with a weakening global stock market and a plummet in gold prices indicating a tightening market sentiment. Meanwhile, the risks of high-leverage institutions and whale positions began to show early signs.
• 23:30 to 00:21 (approximately 51 minutes)
  The price of ETH sharply dropped from approximately $1977 to $1912, a decline of 3.28%, as funds rapidly withdrew, triggering an automatic liquidation mechanism.
• 23:30 to 00:30
  Some data indicated that the price fell from $1973 to $1894, with a drop of 4.01%, further reflecting the chain liquidation effect caused by high-leverage positions.
• 00:50
  The market saw a partial rebound, with the ETH price rising to $1911.63, indicating some buying pressure, though overall risk aversion sentiment remained strong.

Reason Analysis 🔍

1. Weakening Global Macro and Traditional Financial Markets
   Recently, the U.S. stock indices have generally declined (e.g., the Nasdaq fell over 1.5%), while spot gold and silver prices experienced wild fluctuations, with gold briefly dropping below $4950 per ounce. These trends reflect the uncertainty in traditional financial markets and an escalation of risk aversion sentiment. Funds rapidly withdrew from high-risk assets (including digital assets), transmitting to currencies like ETH, resulting in a sharp drop in prices.

2. High-Leverage Positions and Chain Liquidation Risks
   Some institutions and whales previously held large amounts of ETH using high-leverage operations. When market sentiment shifted to panic, stop-loss orders were triggered one after another, causing automatic liquidations. This chain effect exacerbated liquidity tension, leading to a significant price drop in a very short time, with a total liquidation amount across the network reaching $7 million, of which long positions accounted for 84%, and net outflow from main players reached $5 million.

Technical Analysis 📊

(Analysis based on 45-minute candlestick data of ETH/USDT perpetual contract on Binance)

• Price Action and Moving Averages
• The price is currently running along the lower Bollinger Band, indicating it is in a weak trend zone;
• MA5, MA10, and MA20 are in a bearish arrangement, and the price remains below the EMA5/10/20/50/120 moving averages, showing a clear lack of bullish strength.
• Indicator Signals
• The J value is in the extreme oversold region, technically indicating a potential rebound in the short term;
• The KDJ indicator is diverging, showing that downward momentum remains strong;
• The MACD histogram continues to shorten, and the downward momentum has not yet fully released.
• Trading Volume and Liquidation Data
• Trading volume surged by 170.87% year-on-year, reflecting both the pressure of liquidation and panic selling, while some funds attempted to accumulate at low prices;
• In the last hour, the total liquidation amount across the network reached $7 million, while large transaction data showed a net outflow of about $5 million from major players.

In summary, despite the current price touching the lower Bollinger Band and entering the oversold region, there is a possibility of a short-term rebound. However, moving averages and MACD indicators still suggest that the overall downtrend remains unaltered, and the market structure is still bearish.

Market Outlook 🚀

• Short-Term Volatility Will Persist
  Against the backdrop of continuous weakness in the global macro economy and traditional financial markets, the digital asset market remains susceptible to risk aversion sentiment. In the short term, ETH may experience a partial rebound due to overselling, but the remaining risks from high-leverage positions could amplify subsequent selling pressure, causing the price to continue to decrease.

• Focus on Key Support and Risk Control
  Investors need to pay close attention to the technical support areas. If the price breaks below key moving average supports, the downside risk will further expand. It is advisable to implement risk control measures and focus on diversifying risks within positions to avoid chain liquidations triggered by market volatility.

• Market Sentiment and Liquidity Changes
  The uncertainty in the global market, institutional position risks, and the operational dynamics of whales will continue to impact the price trend of ETH. In the upcoming period, regulatory policies, macroeconomic data, and the flow of market funds will be important variables determining the medium to long-term price trend of ETH.

Overall, while some buying pressure has entered the market attempting to stabilize it, ETH still faces multiple pressures. Investors should remain cautious and closely monitor macro and technical dynamics, adjusting strategies in a timely manner to cope with potential further volatility.

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