The market is like chess; one step can lead to heaven and another to hell – with ETH breaking $4200, is it a bull market's charge or a trap set by major players?

Recently, the surge of ETH has completely shaken the cryptocurrency world! Some are shouting "$5000 is not a dream," while others are saying "hurry and run for a 50% loss." Today, let’s break down this "great battle between bulls and bears" in the most down-to-earth way, and discuss the ripple effects of this market trend on altcoins, Bitcoin, and even the entire crypto market.

1. Why are bulls bold enough to shout "$5000"?

1. Institutions and whales are voting with "real money"
Recently, the net inflow of ETH spot ETFs has been even stronger than when Bitcoin ETFs first launched last year! Data from a leading exchange shows that in the past 30 days, "whale" addresses holding over 1000 ETH have cumulatively increased their holdings by 120,000 ETH. It’s like major shareholders in the stock market aggressively increasing their stakes, causing retail investors to follow suit.

2. The expectation of the Federal Reserve cutting interest rates is "invisible fuel"
The market is generally betting on a rate cut in September; once it happens, the dollar index will fall, and funds will surge into risk assets like a tide. Last year, Bitcoin tripled in value under the expectation of rate cuts, and with ETH as the "second brother," there is even more room for a follow-up increase.

3. Technical aspects: "double top becomes double bottom"
Previously, ETH oscillated around $4000, with many saying it was a "double top"; now it has broken through and instead has become a "double bottom." It’s like a "false drop" in the stock market followed by a new high, with the main players washing out positions!

Long Ge's Viewpoint: This surge is not accidental; it is a threefold resonance of institutions, policies, and technical aspects. But remember – the most dangerous thing in a bull market is not the drop but missing out. How many people regretted not getting in when Bitcoin broke $60,000 last year?

2. Why do bears shout "$3500"?

1. $4200 is the "death zone"
Looking at ETH's historical K-line, in May 2021 and January 2022, it reached around $4200, resulting in drops of 75% and 60% respectively! Can it break through this time? History doesn’t repeat itself simply, but it does rhyme.

2. The exchange's "sell wall" is piling up
A certain on-chain monitoring tool shows that in the past 24 hours, the volume of ETH sell orders on exchanges surged by 30%, especially in the $4250-$4300 range, where $200 million worth of sell orders are piled up. It’s like encountering a cliff while climbing a mountain, with people in front throwing stones down.

3. Retail investors' "chasing highs and selling lows" becomes a hidden danger
Recently, on social media, an increasing number of people are shouting "ETH to $10,000," but on-chain data shows that the holding costs of new addresses are concentrated in the $4100-$4200 range. If there is a pullback, these investors may collectively cut losses, triggering a stampede.

3. The impact of this market trend on the crypto market

1. Altcoins "follow the rise but not the fall"
ETH is the "barometer" for altcoins; when it rises, second-tier leaders like Solana and AVAX tend to follow; but when it falls, altcoins may drop even more sharply. Just like in 2021, when ETH fell from $4000 to $2000, many altcoins went to zero.

2. Bitcoin's "passive rise"
Recently, the correlation between Bitcoin and ETH has dropped to 60%, indicating that funds are flowing from Bitcoin to ETH. However, Bitcoin is the "anchor" of the crypto market; if ETH pulls back, Bitcoin may be dragged down as well.

3. The exchange's "laying down to earn" model is restarting
ETH trading volume has surged, and the fee income for exchanges has skyrocketed. An insider from a leading exchange revealed that recently, ETH trading volume accounted for 40% of the entire platform, double the usual amount.

Long Ge's ultimate advice

Short-term players: Keep a close eye on $4220 (resistance level) and $4000 (support level); if it breaks below $4000, run first, and if it stabilizes above $4220, then chase.

Long-term players: Ignore short-term fluctuations and focus on the narrative of ETH's "staking + Layer 2"; this is the foundation of long-term value.

Altcoin players: Wait for ETH to stabilize before taking action; jumping in now may be like "catching a falling knife."

If you are still hesitating about getting in, remember – the most expensive four words in a bull market are 'I’m afraid of heights', and the cheapest two words are 'correction'! Follow Long Ge.