ETH price fluctuates sharply: Technical rebound and risk outlook amid multiple intertwined factors

Event Review 🔍

Within just a few dozen minutes, ETH experienced a round of intense volatility. Starting at 22:40, due to liquidity restructuring and the forced liquidation of high-leverage positions, ETH’s price briefly touched a low of around $3476. Subsequently, driven by a short squeeze effect and institutional algorithmic orders, ETH quickly rebounded to $3553 within 12 minutes, a rise of 2.21%, and continued to climb to $3586 in the following period. Latest data shows that as of 23:22, ETH price adjusted to $3575.77, stabilizing in the short term after intense fluctuations. This process demonstrated the market’s astonishing reaction under the influence of liquidity changes and high-leverage operations.

Timeline ⏰

• 22:40: Market liquidity restructuring began, with multiple institutions’ high-leverage positions being forcibly liquidated amid tightening liquidity, causing ETH to hit a low of around $3476.
• 22:40–22:52: Under the combined effect of short liquidations and technical buy orders, ETH price quickly rebounded to $3553, up 2.21%.
• 22:40–23:20: With continued buying, ETH further climbed from around $3555 to $3586, up 0.89%, showing a technical rebound effect.
• 23:22: After the market digested the earlier volatility, ETH temporarily stabilized around $3575.77.

Reason Analysis 🚀

There are multiple intertwined factors behind this ETH surge:

• Macroeconomic Policy Drivers: Recently, the Federal Reserve and related institutions have introduced a series of measures such as interest rate cuts, ending quantitative tightening, and lowering the discount rate. In addition, the US government and Treasury have been adjusting market liquidity, leading to an overall change in the funding environment.
• Liquidity Tightening and High-Leverage Positions: Some institutions and retail investors operated with high leverage, and the market’s liquidity tightened sharply in a short period, forcing high-leverage positions to be liquidated. This chain reaction created a short squeeze, which in turn drove a rapid price rebound.
• Technical Operations Involved: In the low-price region, some traders and institutions used algorithms and customized technical indicators to automatically enter the market, taking advantage of the brief panic to execute contrarian strategies, resulting in a rapid price surge.

Technical Analysis 📈

Based on Binance USDT perpetual contract 45-minute K-line data, this ETH fluctuation exhibited the following technical characteristics:

• Indicator Signals

• RSI successfully broke above the 50 midline, indicating strengthened short-term upward momentum;

• The MACD histogram continued to grow, suggesting buying power is accelerating into the market;

• The KDJ indicator showed divergence, with frequent appearances of the “Three White Soldiers” candlestick pattern, indicating a clear overall bullish signal.

• Volume-Price Relationship

• Trading volume surged by 173.53%, far above the recent 10-day average, reflecting exceptionally active market trading;

• The OBV indicator broke above previous highs, with a significant increase in buying funds;

• Although short-term trading activity is high, the 10-day average volume fell by 17.98%, indicating that some short-term trading activity may decline, while the 20-day moving average rose by 19.33%, showing the medium-term trend remains robust.

• Moving Average System

• The current price is supported near the MA20, with strong short-term bullish sentiment;

• However, the price is below the EMA120, indicating the overall ultra-long-term trend remains bearish;

• Additionally, the price is above EMA24 but below EMA52, suggesting the rebound may be a brief technical correction within a downtrend.

• Other Data

• In the past hour, the total liquidation across the network was about $9 million, with shorts accounting for 69%, indicating a risk of position turnover amid intense market volatility;

• Mainstream capital net inflow reached $80 million, showing institutions are using technical buying opportunities to bottom-fish.

Market Outlook 🔮

In the short term, ETH is currently in a technical rebound phase after a short squeeze, with active buying entering the market. If the macro liquidity environment warms up or institutions continue to capture low-buy signals, the price is expected to maintain an upward trend near the support level. However, from a medium- to long-term perspective, the price is still below the EMA120, and some technical indicators (such as an extremely overbought J value and some moving averages trending downward) suggest that the risk of a pullback cannot be ignored.

Therefore, while investors focus on short-term trading opportunities, they should strictly control their positions and risks, and closely monitor macro policies and liquidity changes. If there are signs of fiscal policy easing and liquidity returning to the market in the future, this could trigger further upward movement; conversely, if the leverage liquidation effect persists or institutions take profits, the price may enter a consolidation and adjustment phase. Overall, this rebound provides short-term traders with a technical setup opportunity, but the long-term trend should still be approached with caution. It is recommended to enter and exit in batches and manage risk carefully.