Event Review 📉
Recently, the Ethereum market has experienced severe volatility. Starting from a stable range of about $3105–$3107 before the market opened, the ETH price rapidly dropped to about $2997–$3010 within just 40 minutes, with a decline of between 3.1% and 3.5%. Leverage trading has been frequent in the market, with long positions being forcibly liquidated. It was reported that the 25x leveraged ETH position held by the well-known trader Machi was partially liquidated, causing his total assets to shrink rapidly to $20.90 million. This series of events led to a sharp increase in market panic, exacerbating liquidity tension and the chain liquidation effect. Although there was a brief rebound in the market lasting a few seconds, overall, the market remains full of uncertainty.
Timeline ⏱️
00:00: Pre-market prices stabilized around $3105–$3107, serving as a baseline for subsequent fluctuations.
00:00–00:40: The ETH price rapidly fell from pre-market highs to around $2997–$3010, with a decline of 3.1%~3.5%; during this period, high-leverage positions were liquidated and panic selling intensified market sentiment to extreme tension.
00:09: Ethereum ETF data shows a net inflow of about 18,300 ETH (approximately $57.09 million) that day, reflecting that some institutional funds remain active but have not been able to offset the downward pressure.
00:10: The ecosystem welcomed the Fusaka upgrade and several network improvement announcements, with highlights including EIP implementation, new applications going live, and major conferences being held, but the positive news did not reverse the price decline trend in the short term.
00:58: On-chain data shows that due to the market decline, some high-leverage ETH long positions were forcibly liquidated, exacerbating market selling and liquidity risks.
01:10: The ETH price slightly rebounded to around $3015.41, showing signs of brief stability after extreme volatility, but overall market sentiment remains sluggish.
Reason analysis 🔍
There are two key factors behind this sharp market drop:
Increased uncertainty in macroeconomics and policies
Recent U.S. economic data (such as the PCE price index and core PCE) shows moderate changes, but the direction of the Federal Reserve's monetary policy, the end of quantitative tightening, and uncertainties about future interest rate cuts have raised doubts in the market about the overall economic policy direction.
At the same time, regulatory and policy dynamics in multiple countries, especially the judiciary's crackdown on the crypto market and the progress of related cases, have made investors more sensitive to macroeconomic environments and legal policy risks.
Leverage fund liquidation and institutional liquidity risk
The presence of a large number of high-leverage trades in the market triggers a chain liquidation effect during price fluctuations. Multiple large long positions were forcibly liquidated, intensifying panic selling, with funds quickly withdrawing from the market, driving prices down sharply.
In the data of large transactions and explosive order volume, it can be seen that the total explosive order amount across the network reached $10 million in the last hour, with long positions accounting for 84%, and a net outflow of nearly $90 million from the main force, indicating the fragility of internal fund liquidity.
Technical analysis 📊
Based on Binance USDT perpetual 45-minute candlestick data, an analysis of the technical aspects of ETH/USDT:
Indicator performance
The RSI indicator has fallen below 30, entering the oversold area, suggesting that the market may experience a short-term rebound.
The KDJ has formed a dead cross and the indicators are converging, indicating that short-term downward pressure remains significant.
OBV has fallen below previous lows, indicating that selling pressure is dominant.
Volume observation
Trading volume surged by 163.75%, far exceeding historical averages, indicating that funds are highly active during panic selling.
The 10-day and 20-day average volumes have significantly increased, and market trading activity has sharply risen, with abnormal fund flows.
Moving average status
Prices are currently below the MA5, MA10, MA20, MA50, and EMA series moving averages, and this multi-moving average bearish arrangement confirms the overall downward trend.
The candlestick chart shows patterns similar to the belt hold and three external reversal shapes, but overall, the combined volume imbalance has yet to form effective reversal signals.
Market outlook 🔮
The current market is in a phase of intense oscillation between risk and rebound:
Bearish pressure remains
Macroeconomic data, policy uncertainty, and the effects of high-leverage liquidations still pose downside risks. If the market continues to lack clear policy benefits and liquidity relief plans, further declines may still be anticipated.Oversold areas may foster rebound opportunities
The RSI in the oversold range may trigger some short-term buying. For long-term value investors, if the fundamentals are not fundamentally impacted, the current decline may also provide a window for buying on dips.Technical support to watch
In the future, investors need to closely monitor candlestick patterns and transaction volume changes to see if the market can achieve a rebound at key support levels (such as near recent lows), while observing institutional fund inflows and signs of leverage position recovery.Steady operation suggestions
In a high-volatility market, traders are advised to reduce positions, control risks, and pay attention to liquidity dynamics. For short-term operations, it is recommended to set strict profit and loss limits; for long-term layouts, patience is needed to wait for market sentiment to clarify and risk sentiment to improve before participating.
Overall, while ETH's recent sharp decline has caused panic, the oversold state also contains a certain possibility of rebound. Market participants should examine market changes from both macro and micro perspectives, implement risk control and position management, and operate steadily to respond to possible trend reversals in the future.
