1. Technical pressure
After ETH reached around 4788, a historical high, it faced significant technical pressure. The current price has broken previous highs but has not formed sustained upward momentum, showing signs of market weakness. As the price approaches key resistance levels, some short-term investors choose to take profits or adjust their positions, increasing selling pressure and leading to a price decline.
2. Market sentiment fluctuations
In the early stage of the bull market, market sentiment was high, and some investors' expectations were overly optimistic. As the price corrected, market sentiment shifted, and many began to doubt the sustainability of the upward trend, leading to a spread of panic, further exacerbating the release of sell pressure. Especially after Ethereum encountered a correction, some short-term funds chose to realize profits, which also contributed to the price decline.
3. Capital outflow and impact on the contract market
The decline of ETH is closely related to the leverage effect in the contract market. As market volatility increases, some investors with high leverage positions are forced to close their positions, exacerbating capital outflows and further amplifying price fluctuations. Changes in the capital situation of the contract market directly affect the trends in the spot market, especially during market corrections when liquidity decreases, making it easier for prices to be pushed downward.
4. Macroeconomic factors
Recent global economic uncertainty has also impacted the crypto market, especially the monetary policy of the Federal Reserve and global inflation issues, which have put significant pressure on market sentiment. Although the crypto market is usually decoupled from traditional markets, in an uncertain global financial environment, investors' risk appetite declines, and funds tend to flow into safe-haven assets, leading to the decline of risk assets (including ETH).
5. Technical correction
The upward trend of ETH has been very strong since 2020, and as the price gradually approaches historical highs, the market has begun to experience some technical corrections. This correction is a normal market behavior aimed at repairing technical gaps after rapid price increases, adjusting the market structure, and preparing for the next round of increases.
Summary: The current correction of ETH is mainly influenced by a combination of technical aspects, market sentiment, capital flow, and macroeconomic factors. Although there are adjustments in the short term, in the long-term trend, ETH still possesses the potential to break upward. Investors should remain patient and pay attention to the key support levels and changes in trading volume.
Feeling confused by the market's ups and downs? Not sure how to get out of a bad position? Or even feeling like your operations are being led astray? Don't hold back, come talk to me, and I'll help you sort out your thoughts~
