2900 USD has become a battleground for longs and shorts, with whales aggressively betting $400 million on the direction.
Market sentiment is nearing freezing point, with an epic showdown between bulls and bears playing out on Ethereum's price chart.
Late at night, on-chain data suddenly drew a steep curve as a whale injected a large amount of ETH into the exchange, and almost simultaneously, multiple addresses placed buy orders totaling over 200,000 ETH in the $2910-$2930 range. It was like two martial arts masters sparring at the edge of a cliff, where a slight misstep could trigger a market 'earthquake'.
Currently, Ethereum is fluctuating around the $2900 mark, with each dip being strongly pulled back and each rebound facing heavy selling pressure. The outcome of this showdown will determine our investment direction for the coming months.
01 Key battleground: Why has $2900 become a battleground for bulls and bears?
$2900 for Ethereum is by no means an ordinary psychological barrier but the 'Maginot Line' on the technical front. Observing from the daily chart, this position happens to be where a long-term upward trend line that started in early 2023 is located.
Historically, Ethereum has staged a comeback three times on this line. Currently, it is the fourth test, and the outcome will determine the direction of the market.
More critically, if the monthly closing price is below $2930, it may trigger a waterfall drop, targeting the abyss at $2000 or even $1100. However, if it holds, it may construct a structural bottom, creating conditions for a counterattack.
Technical charts show that Ethereum is barely maintaining in the narrow support band of $2800-$2850. The gains and losses in this area will determine whether the market will experience a technical rebound or start a new round of decline.
02 Bear army: Multiple factors converge, selling pressure like a mountain.
The bears are indeed firing on all cylinders right now. On-chain data shows that whales are significantly reducing their holdings.
The well-known crypto whale 'Brother Ma Ji' sold 786 ETH at once, exposing its liquidation line at the sensitive position of $3042. This means that if the market drops about 0.9% more, it will trigger a forced liquidation. This reduction is not a simple profit-taking but a survival decision based on precise calculations.
What’s more concerning is the continuous outflow of funds from the Ethereum ETF. On just December 16th, the net outflow reached $224.2 million, of which BlackRock accounted for $221.3 million. This indicates that institutional investors currently prefer to sell rather than accumulate.
From a macro perspective, the global liquidity environment is also tightening. The interest rate decision that the Bank of Japan is about to announce may declare an interest rate hike, which would be the highest level since 1995. This shift could lead to the unwinding of arbitrage trades, with funds withdrawing from high-risk assets.
The market sentiment index has dropped to 11, entering the 'extreme fear' zone. In the past 24 hours, the total liquidation scale across the network exceeded $500 million, with highly leveraged longs being significantly washed out during the decline.
03 Bull legion: Whales defend the market, technical indicators show a turnaround.
Despite the fierce momentum of the bears, the bulls are also fighting back. Under the pressure of selling, whales have placed a large number of buy orders in the $2910-$2930 range, building a solid defense line.
This 'smart money' is not blindly optimistic. Lookonchain data shows that several high-performing whales have opened long positions totaling 136,433 ETH, worth approximately $426 million.
Among them, BitcoinOG (1011short) has a long position in Ethereum worth as much as $169 million, while Anti-CZ's long exposure has reached $194 million. These professional traders are voting with real money, believing that the current price level is a good entry point.
Technical analysis also gives a glimmer of hope. The price movement of Ethereum may form a classic ascending triangle pattern on the daily chart. Once the price breaks through the triangle's resistance line at $3250, the theoretical target for an upward move is around $4020, more than 28% higher than the current price level.
At the same time, the open interest of Ethereum contracts has steadily increased, soaring from less than $10 billion to a peak of over $35 billion. This indicates that traders tend to maintain their positions rather than liquidate, reflecting market confidence.
04 My view: Short-term caution, but no need to be pessimistic long-term.
At the crossroads of the market, I believe short-term risks cannot be ignored, but the long-term trend is still intact.
The key is to watch two price levels: to the upside, it needs to break through the resistance zone of $3020-$3050, which will confirm the formation of the bottom structure; to the downside, it must hold the support line at $2800. Once this is lost, it may drop to the $2750 or even $2500 area.
For traders with different styles, I suggest:
Short-term traders: You can cautiously go long in the range of $2850-$2800 with a small position, set a stop loss below $2750, and aim for targets at $2980-$3000. If the price rebounds to the $2950-$3000 area, you can short with a light position.
Long-term investors: At the current price level, you can gradually accumulate, but control your position within the range of risk you can bear. The actions of the whales are worth paying attention to, but do not blindly follow them.
All traders: You must reduce leverage to ensure that your positions can withstand the market's intense fluctuations. The current volatility is severe, and any high-leverage actions are equivalent to taking risks.
As the market wrestles at key support levels, an old trading adage comes to mind: 'Markets are born in despair, grow in hesitation, mature in optimism, and die in excitement.' Currently, the Ethereum market is filled with both despair and hesitation.
The market shows that both bulls and bears are still engaged in fierce battles, but the volatility has significantly shrunk, indicating that a big event is about to happen. Whether Bitcoin's support at $85,000 and Ethereum's support at $2,800 can hold will be key to judging whether the market will experience a technical rebound or start a new round of decline.
In the end, the market will make its own choice. What we need to do is not to predict but to prepare to calmly execute your trading plan when the direction is clear.
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