Ethereum (ETH) is facing the risk of sudden price correction due to market sentiment and the actions of cryptocurrency whales.
According to cryptocurrency analysts, ETH can drop in price at any moment due to excessive upward momentum, as whales and market makers liquidate short-term positions and prepare to manage long-term positions affected by FOMO.
MAIN CONTENT
ETH is in a phase at risk of significant price drops due to market correction.
Whales and market makers liquidate short-term positions first.
Long-term FOMO positions may be the next to be liquidated, caution is needed with leverage.
When can ETH drop suddenly?
Crypto analyst Ash Crypto believes that ETH is waiting for a strong correction in the short term due to technical signals and whale behavior in the market.
Currently, Ethereum has risen quite sharply, leading to the risk of a sudden price drop to reset market balance. The movements of whales and market makers are important indicators to recognize this sign.
Why do whales and market makers liquidate short-term positions?
ETH whales and market makers often use short-term positions to take advantage of rapid price movements. They have started to liquidate these positions to reduce risk as signs of a reversal appear.
The activity of liquidating short-term positions helps them protect profits against limited volatility while also preparing for the phase of managing long-term positions that are prone to FOMO. This is a common strategy observed in complex cryptocurrency markets.
ETH may experience a strong correction 'at any moment' due to pressure from long-term FOMO positions as whales gradually liquidate previously opened positions.
Ash Crypto, Cryptocurrency Analyst, 14/08/2024
What is the impact of liquidating long-term positions due to FOMO on the ETH market?
When long positions due to FOMO are liquidated, the market may experience significant selling pressure, creating a rapid and deeper downward momentum. This is a phase where negative volatility is likely if investors use leverage.
Therefore, the advice from experts is to avoid using high leverage when trading ETH during this period. Careful risk management helps limit losses during strong volatility phases.
What precautions should be taken when trading ETH during volatility?
Investors should closely monitor on-chain signals and whale behavior, while also avoiding leverage to prevent forced liquidation when the market corrects.
Protecting the portfolio with risk management tools helps maintain asset safety against unpredictable fluctuations in the cryptocurrency market.
Frequently Asked Questions
Can ETH drop immediately?
According to expert analysis, ETH may drop suddenly due to pressure from the liquidation of positions by whales and market makers.
Why should leverage not be used when trading ETH at this time?
As the market is prone to high volatility, using leverage can lead to position liquidation and significant losses.
How do cryptocurrency whales affect ETH price volatility?
Whales control large volumes, and their actions can create selling or buying pressure, significantly affecting price volatility.
What is position liquidation and why is it important?
Liquidating a position is the act of closing trading positions to avoid deep losses, often occurring when the market is highly volatile.
How to track signals from whales in the ETH market?
On-chain data, whale wallets, and in-depth reports from market analysts can be used.
Source: https://tintucbitcoin.com/eth-co-the-giam-tranh-dung-don/
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