Last night's 'needle': Surge followed by a flash crash
From the chart, it is clear to see the price rapidly rose to 3746, followed by a sharp decline, and then rebounded again, forming a classic 'needle to lure in buyers'.
Core observation of the needle:
Luring point:
In the 3750~3800 range, the liquidation density surged, which is the area where shorts are concentrated for stop-losses.
The main force likely used this area to 'blow up the shorts', triggering a large number of liquidation orders to be forcefully closed, pushing the price up sharply.
Moment of reversal:
After blowing up the shorts, they countered by smashing down to liquidate the longs.
ETH dropped instantly from the high of 3658, triggering the liquidation of many users who chased the price up, a classic case of 'slicing both ends'.
Main force's objective:
Utilize the 'low liquidity' period to perform a needle washout,
Create emotional fluctuations → Liquidate shorts → Attract buyers → Quickly reverse to liquidate longs.
Leaving a mess: both longs and shorts get liquidated, and the main force reaps all the benefits.
The market is prone to 'needles', and high leverage participation is not recommended, especially for users with orders close to the 'dense yellow-green area'.
Operational suggestions:
Support area: The area around 3700 is currently a short-term support, showing signs of bottom formation.
Resistance area: 3783 is the key focus area for tonight.
If it attempts to rise again to 3800, it is recommended to set protective take-profit or reduce positions, to guard against another 'needle smash'.
In summary:
Last night's needle was not a sudden 'accident' in the market, but a carefully laid 'trap' by the main force:
First blowing up the shorts, then reversing to kill the longs, a double liquidation, washing out and collecting the chips.
If you want to know where the key points for ETH are going forward? How might the main force layout their next moves?
