This operation instantly stirred up the market, with some believing it to be the precise prediction of top players, while others bluntly stated, 'This is a signal to send money.' As an experienced stock trader with 8 years of watching the market, I dare say: the whale's position may have a greater impact on the ETH market than the Federal Reserve's interest rate hikes.
1. Shorting with 15x leverage? This is not gambling, but 'laying mines.'
The whale's operation seems to indicate a bearish outlook on ETH at first glance, but upon closer inspection, it is full of risk exposure. What does 15x leverage mean? Ordinary retail investors feel anxious even with 5x leverage; 15x means that if ETH's price rises even slightly, they could face liquidation.
According to futures rules, the liquidation price of this position is likely just above the current price. Once ETH stabilizes at 3700 dollars, when the platform forces liquidation, the system will automatically buy the whale's short position. This is not a small amount; it would be akin to a sudden influx of tens of millions of dollars in buy orders, directly pushing the price further up.
By then, not only will retail investors chase the upswing, but other short sellers will also panic and close their positions, leading to a 'short squeeze.' Last year, SOL rose from 80 dollars to 120 dollars in such a situation.
What deserves more attention is market sentiment. The fear and greed index has skyrocketed above 70, clearly indicating 'greed has gone too far.' While everyone is bullish, the whale is going against the trend and shorting. This scene is very familiar—when BTC surged to 60,000 dollars in 2021, there was also a whale shorting with high leverage, and the result was liquidation, which instead accelerated the bull market. History will not repeat itself exactly, but there will always be similarities.
2. ETH's current strength is stronger than expected.
Don’t just focus on the whale's short operation; the 'confidence' of ETH itself is more crucial.
From a technical perspective, an 'attack signal' has already been released: a 21.7% increase within 7 days, firmly standing above the 3600 dollar mark, and the next target is to challenge 4000 dollars (the high point of 2024). Some are worried that an RSI overbought condition may trigger a pullback, but it should be understood that in a bull market, overbought conditions can last longer; as long as the support level of 3500 dollars does not break, the upward trend will not change. Even more impressively, the exchange's ETH inventory has dropped to a 5-year low; with fewer sellers, a slight buying pressure can push the price up, which is a typical 'supply contraction' market.
The fundamentals are continuously favorable: the two bills just passed by the U.S. House of Representatives effectively set regulatory red lines for stablecoins and digital assets, dispersing the SEC's power. Compliance funds are also more willing to purchase ETH. BlackRock's Ethereum ETF alone saw an inflow of 499 million dollars in one day, and corporate giants are also increasing their holdings; this funding is not for short-term speculation.
Another detail: ETH's staking rate has reached 43%, with 35.6 million coins locked up, and a 5% annual yield makes institutions willing to hold long-term. A decrease in circulation naturally makes the price more resilient to declines. The Layer 2 sector is also not to be outdone, with Arbitrum Nova achieving a trading volume of 120 million transactions in one day; funds and users are gathering on these chains, and ETH as the 'mother chain' will only become increasingly stable in value.
3. How should retail investors operate? Remember the 'Three No Principles'
The whale's short position is like a 'time bomb,' but retail investors should not blindly try to 'defuse it.' Here are two practical strategies that everyone can choose based on their own situation:
Radical: Wait for a pullback to 3400-3500 dollars (near the 30-day moving average) to try a small position for a long. Set a stop-loss below 3300 dollars, which is the 'line of life and death' for the recent upward trend; once it falls below, recognize the loss and exit. The target is first to look at 3800 dollars, and after stabilization, to challenge 4000 dollars.
Conservative: Do not chase the rise; wait until ETH truly stabilizes above 4000 dollars before taking action. At that time, set stop-loss at 3800 dollars, with the target directly looking towards the historical high of 4600 dollars in 2021. It’s important to know that in a bull market, 'waiting for confirmation' is safer than 'guessing tops and bottoms.'
Risks must be clearly understood: if policies change (for example, requiring stablecoins to migrate to another chain), Layer 2 experiences security vulnerabilities, or if the Federal Reserve suddenly announces it will not cut interest rates, ETH's price could drop significantly. The investment in ETH should not exceed 30%; the rest can focus on Layer 2 tokens like ARB, OP, or established DeFi tokens like UNI, AAVE—do not put all your eggs in one basket.
To be honest: whales are shorting with high leverage, either they have insider information, or they are assisting the market. Currently, institutions are buying, the technical indicators show an upward trend, and even the bulls in the derivatives market have almost suppressed the bears (in the past week, 438 million dollars in shorts have been liquidated). At such a time, instead of speculating on the whale's intentions, it is better to focus on price and trading volume—money doesn’t lie, and trends don’t deceive.
Do you think this whale can hold on until ETH rises to 4000 dollars? Feel free to discuss in the comments, follow Su Xiaowan, and let’s achieve stable investments together!
