The 'Liquidation Push' Behind ETH's Surge

Last night’s surge in ETH was not mysterious at all and can be explained in two words: liquidation.

Below 3700, especially in the 3600-3680 range, there exist a large number of concentrated stop-loss points for short positions. This means many people opened short positions or set stop-loss protections in this area.

Once the price surges and triggers these stop-loss points, it can lead to a 'chain liquidation', resulting in a waterfall-like passive buying momentum. In other words, this is not an active push from the bulls, but a passive stampede from the bears.

The essence of this price increase

The closer the price gets to the 3773-3800 range, the denser the liquidations become.

Bulls utilize points of thin liquidity to launch an attack, triggering consecutive liquidations of short positions above.

The balance of the long-short game is disrupted, leading to a massive liquidation of short positions, which causes the price to rise rapidly.

This is a typical liquidation-driven surge.

Market trend judgment: Key levels are at 3680 and 3830.

From the chart, we can see:

3680-3700 is currently the strongest support zone, as a large number of liquidations have already occurred, and the chips have been consumed, making it difficult to form a strong bearish sentiment in the short term.

The area near 3830 is a potential pressure zone, as the density of liquidations above decreases and liquidity is relatively weak. Unless another chain liquidation is triggered, it will be hard to break through quickly.

Short-term prediction

If ETH can hold above 3680, it is expected to attempt to challenge the highs near 3830 in the short term.

If it dips below 3680, it may retest the dense support area around 3600.

This surge is not a trend reversal but a standard 'bear liquidation market', where the liquidation of short positions drives the price up rapidly. Moving forward, we need to continue monitoring the transition in the densely liquidated areas, especially whether the support zone can hold, as this will determine if the price will continue to rise or return to range-bound fluctuations.