The current ETH market presents a weak oscillation pattern with decreasing volume. The spot and contract prices are basically flat, with a very small price difference, but the price has dropped nearly 5% in the past 24 hours, and the trading volume is only 0.2 times the average, indicating that the downward momentum has weakened, but buyers have not yet entered in large numbers. The trading volume in the contract market has plummeted by over 40%, and the open interest remains high, with the market in a wait-and-see phase after intense confrontation between bulls and bears.
Key price and range structure
1. Value Anchor Zone: According to VPVR, the market's value anchor point (POC) is at 3029.75, which is the price level with the highest trading volume recently. The value area ranges from 2800.00 to 3207.29, and the current price of 3094.73 is in the upper half of this range, but close to the POC, indicating that the price is testing the core value area. The POC (3029.75) and the lower edge of VA (2800.00) are key supports below, while the upper edge of VA (3207.29) is an important short-term resistance.
2. Trend and Volatility Range: The current price of 3094.73 is about 1.8% below MA200 (3152.25) and cost of position (3151.74), indicating a weak medium to long-term trend. The price is in the lower half of the Bollinger Bands (2990.43 - 3223.29) (44.8%), indicating weak oscillation. The lower bound of the Bollinger Bands (2990.43) and the integer level of 3000.00 along with POC (3029.75) form a dense support area.
3. High Trading Volume/Chip Concentration Area (HVN): VPVR data shows that 3000.00 and 3031.00 are significant buying concentration areas below (with massive buy orders), forming strong support. Above, 3150.00 and 3170.00 are obvious selling concentration areas, forming strong resistance. Prices are likely to pause or reverse in these areas.
Derivatives and Liquidity Analysis
The current signals in the derivatives market are complex. On one hand, the funding rate is close to zero, and the spot/contract price difference is minimal, indicating a neutral to cold market sentiment, with no extreme bullish or bearish leverage crowding. On the other hand, contract trading volume plummeted by 43.4% within 24 hours, but open interest (OI) remains at a high of 6224.69M. This "shrinking high holding" situation usually indicates that after significant volatility, traders choose to hold positions and wait for new directional signals. The long-short ratio slightly decreased from 2.8821 to 2.8475, still at a relatively high level, indicating that long positions still dominate but are slightly easing. In this environment, liquidity is contracting, and the market's sensitivity to news or large orders will increase. It's not suitable to amplify leverage, and any strategy should reduce positions to cope with potential severe volatility due to liquidity shortages.
News and Event Impact
News summaries indicate that the market lacks specific event-driven catalysts, but sentiment fluctuations are evident. For instance, there is a news headline stating "Ethereum dropped 5% today, while the crypto market rose slightly," and mentions that "Ethereum's sentiment has fluctuated significantly in recent days." This reflects the current ETH trend being relatively independent and weak, with unstable market sentiment. Overall news sentiment leans towards bearish/neutral, primarily aggravating investors' confusion and wait-and-see sentiment rather than providing clear trend guidance.
Trading strategy
Plan 1: Conservative/Value Reversion Strategy (Long)
• Direction: Long
• Entry Range: 3020.00 - 3040.00 (POC 3029.75 and below HVN support area)
• Stop Loss: 2980.00 (Bollinger Bands lower bound 2990.43 below, breaking this would damage short-term structure)
• Target: 3150.00 (Main selling concentration area above and near MA200)
• Expected Risk-Reward Ratio: (3150 - 3030) / (3030 - 2980) = 120 / 50 = 2.4
Plan 2: Aggressive/Rebound Failure Strategy (Short)
• Direction: Short
• Entry Range: 3150.00 - 3170.00 (Main selling concentration area and MA200 resistance area)
• Stop Loss: 3200.00 (Value Area upper bound 3207.29 below)
• Target: 3030.00 (POC and key buying area)
• Expected Risk-Reward Ratio: (3150 - 3030) / (3200 - 3150) = 120 / 50 = 2.4
Risk Warning and Position Management
1. Liquidity Risk: Contract trading volume plummeted by 43.4%, market depth is insufficient, large orders may trigger severe slippage, especially at key levels like $3000 and $3150.
2. Long Squeeze Risk: Although the long-short ratio has slightly decreased, it remains high (2.8475). If the price effectively breaks below the $3000 key support, it may trigger concentrated stop losses from longs, accelerating the decline.
3. Sentiment Shift Risk: The current buy-sell pressure ratio indicates buying interest (1.74x), but there are more sell orders close to the market, resulting in conflicting market sentiment, making rapid reversals likely.
Position Management Recommendations:
• Given that the market is in a phase of reduced volume oscillation and liquidity contraction, it is strongly recommended to avoid using high leverage.
• Total position risk exposure should be controlled within 1%-2% of the total account funds. A phased entry strategy can be adopted, for example, entering in two batches within the entry range of Plan 1.
• If there is a continued shrinkage in contract trading volume (e.g., dropping below an average of 0.1 times) or a sudden significant drop in open interest (signal of liquidity exhaustion), new positions should be paused, and consideration should be given to reducing existing positions.
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