Event Review 📈
On June 18, 2025, ETH experienced significant fluctuations within just one hour. At 02:30, ETH was reported at $2464, and then boosted by US May CPI lower than expected and a gradual rise in core interest rates, along with a large number of 25x leveraged short positions being squeezed in the market, buying power was quickly released, driving ETH price to soar significantly. At 03:45, the price reached $2543, and then adjusted to $2540.81 at 03:50, showing brief signs of profit-taking.
Timeline ⏰
02:30: ETH price is reported at $2464. The US announced May CPI (annual rate 2.4%) and core interest rate only rose by 0.1%, changing market expectations, while high-leverage shorts face the risk of being squeezed, leading to a shift in market sentiment.
03:45: Within about 1 hour and 15 minutes, ETH price rapidly rose to $2543, with a cumulative increase of approximately 3.20%.
03:50: After a brief adjustment, ETH price stabilized at $2540.81, with some market profit-taking, and sentiment tending to stabilize.
Reason Analysis 🔍
Positive Macroeconomic Data
US May CPI data was lower than expected, and the limited change in core interest rates made the market optimistic about interest rate cuts and improved liquidity, boosting risk assets.Leverage Position Squeeze Effect
Earlier, a large number of ETH short positions established with 25x leverage (opening price $2780, liquidation price $2948) were forced to close at a critical moment, causing a short squeeze and accelerating the release of buying power.
Technical Analysis 📊
This technical analysis is based on the 45-minute candlestick chart of the ETH/USDT perpetual contract on Binance, revealing subtle changes in market sentiment from various indicators:
Bollinger Band Middle Line: The price has crossed above the middle line of the Bollinger Band, releasing a bullish signal.
KDJ Indicator: The indicator shows divergence, indicating an increase in upward momentum.
OBV Indicator: OBV has crossed above its moving average, suggesting that buying power is strengthening.
Changes in Trading Volume: Overall trading volume decreased by 30.62%, indicating a temporary weakening in market activity, but short-term and medium-term moving averages (10-day, 20-day) saw trading volumes rise by 17.51% and 8.95% respectively, indicating a recovery in localized trading activity.
Candlestick Patterns: The chart shows more than three consecutive bullish candles (Red Three Soldiers pattern), conveying a short-term bullish signal.
Moving Average Arrangement: Although MA5, MA10, and MA20 show a bearish arrangement, the price is currently below the EMA120 moving average, suggesting a long-term bearish outlook. However, in the short term, the price is above EMA24, indicating a possible rebound amidst a downtrend.
Overall, technical indicators show that buying power is strengthening, but moving average configurations still display some profit-taking pressure, with short-term fluctuations coexisting with a medium to long-term downtrend.
Market Outlook 🌟
Considering both macro and technical factors, the future trend of ETH is full of uncertainties:
Short-term Volatility: Currently driven by buying power, there may continue to be some upward momentum in the short term. However, profit-taking and shrinking trading volume indicate that some investors may reduce positions at highs, and market sentiment remains noticeably volatile.
Macro Support: If US economic data continues to perform moderately, along with expectations for improved liquidity, it will provide long-term support for ETH and other risk assets. However, the risks of high-leverage short positions still need to be monitored, as a market adjustment could trigger a new round of short squeezes.
Risk Warning: Investors should closely monitor further economic data and changes in trading volume, maintain cautious operations, adjust positions in a timely manner, and manage risks appropriately. For investors who are optimistic about the fundamentals and technical structure in the long term, it may be possible to accumulate positions at lower prices, but short-term volatility may pose significant trading risks.
Overall, this drastic fluctuation of ETH reflects the market's response to multiple intertwined factors such as macro data, leveraged positions being released, and technical signals. Investors should remain vigilant towards medium to long-term trends while capturing short-term opportunities.
