With Triple Witching Day approaching this Friday, the crypto market has once again fallen into a high volatility risk zone. The recent rise of Ethereum has attracted a large number of retail investors to chase the price, but the underlying settlement risks and trap for long positions may be brewing a domino-like crisis of a sharp decline.
❗ What is Triple Witching Day? Why should we be cautious?
Triple Witching Day refers to the phenomenon when stock index futures, stock index options, and individual stock options expire simultaneously on the third Friday of each quarter. Historically, this has triggered liquidity withdrawals, large-scale liquidations, and directional misfires in traditional markets multiple times. As traditional finance and crypto assets gradually become correlated, the crypto market may also be affected at this juncture.
In particular, during this round of Ethereum's rise, the following high alerts have emerged:
⚠ Clear signs of a long trap.
Funding rates turn positive, leverage overheating.
$ETH The funding rate for ETH perpetual contracts has clearly turned positive, with long positions being overly crowded. If the main players start to sell, the short squeeze will quickly expand the decline.
On-chain activity has cooled down, with prices decoupling from fundamentals.
According to Glassnode data, the number of on-chain transactions and active addresses for Ethereum has not seen a significant increase, suggesting that this wave of market activity lacks substantial buying support.
Technical indicators reach a significant pressure zone.
Currently, ETH is close to the upper band of the monthly Bollinger Bands, with a MACD death cross beginning to appear. If the price cannot break through the $2,600 resistance level, it will quickly retreat to $2,200 or even lower.
🧨 Yield rates and inflation data are simultaneously putting pressure.
The Federal Reserve has maintained a hawkish stance this month, and the yield on the 10-year U.S. Treasury bond has returned to a high point, indicating a decline in market risk appetite. Once funds withdraw from risk assets after Triple Witching Day, high-volatility targets such as ETH are bound to come under pressure.
