Market data shows that the probability of the Federal Reserve maintaining interest rates unchanged in January next year is as high as 75.6%. On the surface, it seems like 'bad news has been exhausted', but I sense a hint of danger.
Meanwhile, Ethereum is fiercely competing at the key level of $2880. This seemingly lively rebound, is it the starting point of a new round of increases, or a trap carefully laid by the main forces? As a veteran who has been in this market for many years, I would like to share some personal views today.
01 Data Pivot: The Truth Behind the Federal Reserve's 'Pause'
The Federal Reserve's decision to stay put is interpreted by many market participants as 'good news'. But let's think deeply: maintaining interest rates at near twenty-year highs means that the cost of capital remains high.
In this environment, risk assets driven by liquidity are like being bound by invisible ropes. Although there is no further tightening, there is also no relaxation, and the US dollar remains strong. Historical data shows that cryptocurrencies struggle to initiate large-scale bull markets in high-interest-rate environments.
More concerning is the gap between market expectations and reality. Although the Federal Reserve has paused interest rate hikes, inflationary pressures still exist, and the timing of rate cuts keeps getting pushed back. This 'hawkish pause' represents substantial medium- to long-term pressure for the capital-intensive crypto market.
Analysts point out that the current market sentiment has shifted to 'fear', with buying power significantly lacking and trading volume continuing to shrink. In this scenario, any rebound should be treated with caution.
02 Technical Signals: The Secrets Revealed by the ETH Market
From a technical perspective, Ethereum's current situation is quite delicate. $2880 is a critical watershed, as this position is not only a psychological barrier but also a recent balance point for bullish and bearish forces.
Currently, the MACD DIF value for ETH on the daily chart is -65.19, operating below the zero axis, indicating that the medium-term trend remains bearish. Each rebound is suppressed by the moving average system, making it difficult to form effective breakthroughs.
What is even more concerning is that Ethereum is significantly weaker than Bitcoin. While Bitcoin struggles above the $85000 support level, Ethereum has fallen below the critical psychological level of $3000. This weak correlation is worth monitoring.
On-chain, Bitcoin held for over two years is flowing into the market for cashing out at a rare speed. The loosening of these 'diamond hands' often signals a potential for greater adjustments.
03 Market Structure: Direction Indicated by Whale Actions
In the past 24 hours, several whales have concentrated on reducing their ETH holdings. On-chain data from Lookonchain shows that wallets associated with Lido Finance founding members sold 14,585 ETH in just one hour, worth approximately $42.7 million.
At the same time, two other whales collectively sold 14,000 ETH. This concentrated reduction has released over 28,500 ETH of short-term selling pressure to the market.
Whales' reduction behavior often has a forward-looking nature. When these large holders choose to offload during a rebound, it indicates that they believe the current price has reflected or even overestimated the short-term value.
However, the supply of ETH on exchanges has dropped to a multi-year low, which may indicate a potential decrease in selling pressure. This supply contraction could lay the groundwork for a future price rebound, provided that demand can recover.
04 Liquidity Crisis: Chain Reactions in the Derivatives Market
The market accumulated excessive leverage before the decline. When prices break below key levels, it triggers large-scale forced liquidations. Over the past 24 hours, the total liquidation amount across the network exceeded $520 million, with a high proportion of long liquidations.
This chain reaction further amplifies the decline. High leverage acts as an amplifier of market volatility and a wealth harvester for retail investors.
The CoinGlass liquidation heatmap shows that a substantial amount of liquidity remains concentrated above the $3000 mark. If selling pressure eases, this area could become a 'magnet' for price rebounds. However, there is also a need to be wary of losing the 61% Fibonacci retracement level—once this support fails, ETH may test previous lows around $2607.
Currently, market volatility has clearly increased, and short-term price movements are easily influenced by derivatives market liquidations. For ordinary investors, reducing leverage is the top priority for survival.
05 Operational Strategy: How to Survive in a Volatile Market
In the face of the current market, my personal strategic thinking is as follows:
First, clarify the key positions. Strong resistance for Ethereum is in the $2880-$2930 area, which requires significant volume to break through effectively. Key support below is in the $2730-$2785 range; once this is lost, it may initiate a deeper correction.
Second, control your position and remain flexible. In the current volatile environment, it is unwise to operate with heavy positions. I will keep my position within a manageable range to ensure there is enough ammunition to cope with potentially extreme market conditions.
Third, avoid chasing highs and killing lows. Do not blindly chase the ups before clear directional signals. Short-term traders may consider lightly testing bullish positions near support levels, with strict stop-loss settings.
Lastly, and most importantly: maintain patience. The market never lacks opportunities; it lacks capital. In the current highly uncertain environment, cash is also an important allocation.
As night falls, the competition in the crypto market will enter a heated phase. $2880 is not only a key technical position but also a psychological defense line for both bulls and bears.
In this market, surviving is more important than making quick money. When most people are swayed by emotions, maintaining rational judgment is your most powerful weapon.
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