These 2 levels determine the big bearish candle for ETH, leaving short-term traders in the crypto space confused! Suddenly dropping in volume from around $4500, with a maximum single-day drop of over 4%, many retail investors who chased the rise in the past two days were directly trapped at high positions. Some panicked and cut losses, while others guessed it was the main force's washout—actually, there's no need to get caught up in 'washout or dump', the key is to look at two core points: the bullish-bearish boundary at $4380 and the resistance level at $4440. Keep a close eye on these two positions; whether to short or stop-loss, the answer is naturally clear.

1. First understand: Why did ETH suddenly plummet? The signs of the main force's washout are very obvious.

This time, ETH's volume drop appears to be a "pullback after a rise", but in reality, it is the main force's precise harvesting of "chasing retail investors". Several details can indicate the intentions behind the washout:

1. "Inducement signals" before the plunge: rising quickly and chasing fiercely

In the past two days, ETH surged from $4200 to $4500, seeming strong but actually hiding risks — during the rise, trading volume gradually shrank, indicating a "low-volume surge", which means buying pressure has not kept up. However, many retail investors blindly chased the price after seeing the "breakthrough of the previous high", even leveraging their positions, which just gave the main force an opportunity to wash out. Data shows that before the plunge, the long-short ratio of ETH perpetual contracts soared to 1.8, meaning the number of long positions was 1.8 times that of short positions. This "concentration of long positions" means that as long as the main force slightly sells off, it can trigger a long squeeze, thereby amplifying the decline.

2. The "Volume Manipulation" during the plunge: increasing volume but not "flooding"

Although there has been a volume drop, a closer look at the market will reveal that there was no extreme selling during the drop; instead, there was noticeable bottom-fishing capital near $4310 — on-chain data shows that there are 3 whale addresses in this range that cumulatively bought 23,000 ETH (worth about $100 million). If it were a true sell-off, the main force would not give retail investors the chance to "bottom-fish", nor would they stop at key support levels. This kind of "volume scares retail investors, low volume accumulates chips" operation is a typical washout tactic.

3. The market environment is not bad: BTC is still holding above $110,000

ETH's plunge has not triggered a market crash; Bitcoin has consistently oscillated around $112,000, not breaking the key support of $110,000. It’s important to understand that ETH, as the "leading altcoin", often moves closely with Bitcoin. If a systemic risk were causing the plunge, BTC would not be able to maintain its position. With BTC stable, it suggests that ETH's decline is more of a "short-term adjustment" rather than a market-wide reversal, and the probability of a washout is much greater than a true sell-off.

II. Key points determine life and death: $4380 is the dividing line, $4440 determines direction

For short-term operations, there’s no need to guess the main force's intentions; just focus on two key points — these two positions are the "battleground" for both bulls and bears. Whether it breaks above or below will directly determine the next trend:

1. $4380: the dividing line between bulls and bears; sideways movement indicates accumulation

If ETH oscillates in the range of $4310-$4380 and does not fall below $4310, it indicates that the main force is in a "sideways accumulation". This range is both a "pullback halfway" of the previous uptrend and a support level for the 20-day moving average. Retail investors will panic and cut losses when they see sideways movement, while the main force seizes the opportunity to take away the bloodied chips. Once it oscillates in this range for more than 24 hours and trading volume gradually decreases, it means that the washout is nearing its end, and a rebound is likely, with the first target looking at $4440.

2. $4440: if the resistance level does not break, continue to be bearish down to $4250-$4180

If ETH attempts to rebound but encounters resistance near $4440 (for example, if it rebounds to $4420 and then starts to fall) and consistently fails to break through $4440, there is no need to hesitate; continue to bearish. $4440 is the "starting point" of this plunge and also the dense area of previous trapped positions. Many retail investors who chased high will be waiting here to "break even and exit", resulting in heavy selling pressure. As long as this position cannot be broken, ETH is likely to continue to drop, with the first target at $4250 (30-day moving average support) and the second target at $4180 (upper edge of the previous oscillating platform).

3. In case it breaks $4440: don’t stubbornly hold short positions, stop loss in time

If ETH breaks above $4440 with volume and stands firm above this level (for example, if the closing price exceeds $4440), it indicates that the washout is over and the main force is about to start pushing up. At this time, if you have short positions, be sure to stop loss in time; don’t cling to the illusion that "it will fall further" — once ETH breaks through the resistance level, it is very likely to fill the gap at $4500 or even surge towards $4600. The core of short-term trading is to "recognize mistakes quickly"; going against the trend will only lead to greater losses.

III. Strategies for trapped retail investors: 2 moves to defend and break even, do not linger in the battle

Many retail investors who chased high in the last two days are now trapped in the $4400-$4500 range, anxiously asking whether to "cut losses". In fact, there’s no need to panic; by following these two steps, you can both reduce losses and seize opportunities to break even:

1. First move: set a "stop-loss baseline"; don’t let small losses turn into big losses

If your long position cost is above $4450, set your stop loss below $4310 (for example, at $4300). Once ETH falls below $4300, it indicates that the trend has turned bad, and holding on will only lead to deeper losses. Setting a stop loss at $4350 is advisable if your cost is below $4400; if this position breaks, it also indicates that the sideways accumulation has failed, and it is likely to drop further.

2. Second move: "small position averaging down" to lower costs, don’t go all in

If ETH oscillates in the range of $4310-$4380 and you still have spare cash, you can lower your cost by using a "small position averaging down" method. For example, if you bought 10 ETH at $4400 and now it falls to $4350, you can buy another 5 ETH, making your average cost $4383. As long as it rebounds to $4390, you can break even. However, be careful: the averaged position cannot exceed 50% of the initial position, and it can only be done once; don’t average down repeatedly and end up fully trapped.

3. Key reminder: don’t linger in the battle; exit once you break even

Whether it's for stop-loss or averaging down to break even, remember one principle: don’t be greedy after breaking even; first exit and observe. ETH is currently in a "bull-bear divergence period"; the trend is still unstable. Holding onto the principal after breaking even and waiting for clear signals to re-enter is much better than staying in and being afraid. Many retail investors end up deeper in a hole just because they "want to make back their losses" and continue to fight, ultimately losing all their principal.

ETH's sudden plunge essentially cools down the "chasing sentiment" of the main force. Short-term players may be intimidated by K-line fluctuations, but as long as they focus on the two points of $4380 and $4440, they can see the main force's intentions clearly. For trapped retail investors, the most important thing now is to "control emotions"; stop loss when necessary and average down when needed, don’t let panic or greed cloud your judgment.

Remember: there are no "sure profit markets" in the crypto world, only "controllable risks". Keep a close eye on the points and manage your positions; it’s 100 times more reliable than guessing the main force's intentions. Do you think ETH can drop to $4180? If it rebounds to $4440, will you choose to stop loss or continue to be bearish? Let’s discuss your plan in the comments!