Event Review 📅
Recently, ETH price has experienced dramatic fluctuations, drawing widespread attention from the market. The US government shutdown led to a tightening of global liquidity, accelerating the outflow of funds from risk assets, which has planted deep hidden dangers for the crypto market. At the same time, the exposure of positions by several high-leverage traders triggered a chain liquidation event, further intensifying the downward pressure on prices. For example, a well-known trader held a long position of 988 ETH with 25x leverage, with a liquidation price of only $3,120, which is undoubtedly a typical case of concentrated market risk. Although some funds attempted to bottom-fish after the extreme volatility, bringing about a partial rebound, overall market sentiment remains cautious and risk-averse.
Timeline ⏰
- 04:39 (UTC+8): News broke that ETH price dipped to around $3,200, initially signaling liquidity tightening.
- 04:56 (UTC+8): A news flash revealed that a 25x leveraged long position (988 ETH) was at risk of liquidation, with the liquidation price locked at around $3,120.
- 04:57 (UTC+8): The price dropped further to about $3,188.78, intensifying market panic.
- 05:00 (UTC+8): ETH price fluctuated between $3,212 and $3,218, with initial skirmishes between buyers and sellers, but market sentiment was already fatigued.
- 05:00–05:31 (UTC+8): In just 31 minutes, the price plummeted from $3,218 to $3,106, a drop of about 3.48%, reflecting a surge in short-term selling pressure.
- 05:00–05:35 (UTC+8): Another set of data showed ETH price plunged from $3,212 to $3,055, a decline of 4.87%, further confirming the spread of the liquidation effect.
- 05:34 (UTC+8): A news flash indicated ETH broke below the $3,100 mark, trading at around $3,102.18, approaching a key liquidation line.
- 05:37 (UTC+8): The market crashed, with ETH dropping by a cumulative 14%, and panic sentiment erupted across the board.
- 05:52 (UTC+8): Monitoring data showed that ETH had plummeted 15% on the day, with a series of chain liquidation effects clearly evident.
- 06:00 (UTC+8): After a brief rebound, ETH price recovered to about $3,210.15, but overall volatility risk remained high.
Cause Analysis 🔍
The sharp volatility in ETH this time can be mainly attributed to the following two core reasons:
- Global Liquidity Tightening
- The US government shutdown triggered cross-market capital strain, with multiple reports showing large-scale outflows from risk assets. Against this backdrop of capital withdrawal, ETH price quickly came under pressure, indirectly affecting the entire crypto market.
- High-Leverage Positions Triggering Liquidation Effect
- High-leverage positions faced violent shocks as the market turned sharply downward, forcing trading platforms to initiate forced liquidations. Chain liquidations not only rapidly increased selling pressure but also triggered emotional follow-up actions by other traders, accelerating the price decline.
These factors intertwined, forming a double blow that led to the current severe market volatility.
Technical Analysis 📊
Data Source: Based on Binance USDT perpetual contract ETH/USDT 45-minute candlestick data
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Bollinger Bands and Buy/Sell Signals
When the price dropped to the lower Bollinger Band, a brief rebound occurred, which could become a recent buy signal. However, the overall movement along the lower band indicates short-term weakness. -
KDJ Indicator and TD Sequential Signals
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The KDJ indicator showed a golden cross, which may suggest some funds are bottom-fishing, but the divergence among indicators also shows the market remains in a fierce tug-of-war between bulls and bears in the short term.
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Meanwhile, TD Sequential showed a bullish Setup (9) and price reversal signals, which may indicate a short-term trend reversal. Close attention should be paid to whether the pullback support can hold.
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Moving Average System and Trend Judgment
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Short-term moving averages (MA5, MA10, MA20) are arranged in a bearish pattern, showing strong downward pressure; medium- and long-term moving averages (MA50, EMA120) are also sloping downward, indicating the overall downtrend is not over.
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Some EMA indicators (such as EMA20 with a slope of -2.69%) show that downward momentum remains strong, while EMA24 and EMA52 further confirm the medium- and long-term downtrend.
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Trading Volume Insights
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Recently, trading volume has surged, with single large liquidations totaling nearly $20 million, and long positions accounting for 68%, indicating unusually active trading amid panic sentiment.
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Main funds saw a net outflow of about $80 million in the past hour, which also intensified the market's bearish pressure.
In summary, although some technical signals show signs of a local reversal, the overall moving average arrangement and volume changes still reveal strong bearish signals, with short-, medium-, and long-term trends all biased to the downside.
Market Outlook 🧐
The future direction of the market will depend on the following key factors:
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Liquidity Recovery Expectations
If the US government can end the shutdown soon, global liquidity is expected to improve, which could help risk assets regain some support. Otherwise, the market will continue to be affected by tight capital in the short term. -
Leverage Positions and Liquidation Risk
If high-leverage positions continue to trigger liquidations, it could set off a broader chain reaction, further depressing prices. Traders should closely watch whether key support levels (such as around $3,100) can hold to prevent the market from falling into panic-driven declines. -
Technical Indicator Stabilization Signals
Some current technical indicators (such as KDJ golden cross, TD Sequential bullish Setup) suggest that local bottom-fishing may occur, but the moving average system and large transaction data still warn of overall downward pressure. Investors are advised to closely monitor subsequent moving average trends and capital flow changes to adjust their positions in a timely manner.
Overall, the current ETH market remains full of uncertainty. Investors should remain cautious, manage their positions reasonably, and avoid blindly chasing rallies or panic selling. Technicals show initial reversal signals, but under the pressure of global liquidity tightening and leverage liquidations, the market may continue to fluctuate in the short term. Rational analysis and prudent operation remain the best strategies in the current market environment.
