Recently, the madness in the crypto market has pushed ETH to a new high of $4683, with a daily surge of 7.19% and a net inflow exceeding $135 million. However, looking at the 'exaggerated opening' of the Bollinger Bands and the long shadow of the high-level fluctuations in the K-line, many are starting to panic: is this surge the starting point of a bull market, or the last hurrah? Will a pullback come?
One, technical aspect: The 'opening' of the Bollinger Bands hides danger.
First, look at the Bollinger Bands indicator (BOLL):
1-hour level: ETH price has surged from the lower band to the upper band, with the Bollinger Bands opening wider (upper band 4724, lower band 4380), and the price is just one step away from the upper band. This 'extreme opening' in the crypto market often means 'overbought warning' — like a spring pulled to the limit, ready to bounce back at any moment.
4-hour level: Although the overall trend is still upward, the Bollinger Bands middle line (4332) has strong support, but the price is already significantly deviated from the middle line (up over 300 dollars), and such a large deviation = strong pullback demand (funds will instinctively 'take profits').
Two, capital aspect: The 'silent battle' behind the celebration.
Let's look at the capital flow:
On the surface, a net inflow of 135 million seems strong, but funds in the crypto market 'come quickly and leave even faster'. If the following signals appear, the market may take a sharp turn downwards:
Transaction volume stagnation: If the transaction volume begins to shrink during subsequent rises, it indicates 'insufficient funds chasing the highs', and the bullish momentum is weakening;
Contract funding rate soars: If the funding rate of ETH contracts continues to rise, it means bulls are leveraging too aggressively and may be 'liquidated' by bears at any moment (refer to previous collapses of LUNA and FTT, which were tragedies of leveraged liquidation).
Three, the 'inertia law' of the crypto market: After a surge, is a pullback inevitable?
The rules of the crypto market are harsh: the crazier the rise, the easier the pullback. The reason is simple —
Emotion-driven market: This surge in ETH is more about 'market FOMO sentiment + fund speculation', rather than a fundamental change (for example, ETH staking rate and Layer 2 progress haven't shown any disruptive positive news);
Leverage amplifier effect: The contract leverage in cryptocurrencies (up to 100 times) makes both rises and falls extreme. Once bulls start to close positions, the speed of the decline will be sharper than the rise (refer to the 'Heaven and Earth Needle' trend of the 2021 bull market).
Four, key signals: Keep a close eye on these two positions!
If you want to judge whether a pullback is coming, keep a close eye on these two key positions:
Short-term resistance level: $4683 (today's high). If it fails to break multiple times and shows **'increased volume drop'**, it's a pullback signal;
Stop-loss support level: $4552 (1-hour Bollinger Bands middle line). Once it breaks, it is highly likely to trigger a chain of stop-loss orders, magnifying the pullback.
Five, operational advice: Don't be the 'bag holder'!
Holders: Gradually reduce positions! For instance, sell part if it rebounds above 4650, and decisively liquidate if it drops below 4552 (preserving profits is most important);
Onlookers: Don't chase the highs! Wait for a pullback to the $4400-$4500 range before considering, or wait until the Bollinger Bands narrow and indicators recover before entering;
Contract players: Set stop losses strictly! Bulls shouldn't hold positions, and bears shouldn't blindly short (before the trend reverses, pullbacks are also 'shorts', quick in and out).
The insane rise of ETH is tempting, but the 'scythe' of the crypto market always presents more risks than opportunities. Remember: a true bull market won't rise completely in one day; however, a crazy market often ends with a 'sharp decline pullback'. Keep a close eye on indicators, control your positions, and don't let greed swallow up your profits!$ETH #ETH突破4600