$ETH Crash Truth: Technical Indicators Set the Trap Early, U.S. Stocks Collapse in One Shot!
Last night ETH fell from $2550 to $2363, dropping 7% in one hour. Many people are asking why this happened; this drop was mainly caused by technical indicators and the linkage with U.S. stocks.
The technical indicators had shown signs early on. The $2550 level was stalled for three days, with three attempts failing, exhausting the bullish momentum. Before the crash, the price reached a new high, but the RSI indicator on the 1-hour chart moved downwards, forming a bearish divergence. Subsequently, the $2500 support level was breached, triggering programmatic stop-loss orders and causing a chain reaction of selling.
News was dragged down by U.S. stocks. Last night, U.S. retail data fell short of expectations, and the Dow Jones dropped by 400 points. The cryptocurrency market is highly correlated with U.S. stocks; institutions sold off ETH and other risk assets due to the drop in U.S. stocks. On-chain data showed that institutional accounts on Coinbase sold over 5000 ETH during the crash, perfectly synchronized with the plunge in U.S. stocks.
Currently, attention should be paid to the $2360-$2380 range. This area is a support level formed in January this year, and on-chain data indicates that 450,000 ETH are stacked here. If U.S. stocks stabilize, ETH may rebound here; if U.S. stocks continue to decline or ETH breaks below $2360, the next step could test $2300. During market panic, one should pay attention to potential opportunities.
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