1. The Capital Game Behind the Crash: The Bull-Bear Showdown Triggered by the Release of 850,000 ETH
On August 18, Ethereum's price plummeted over 10% in a single day, falling below the critical level of $4300, with hourly candlesticks showing a step-like decline and trading volume continuously increasing. The core driver of this intense volatility is the current queue of 850,000 ETH awaiting release, representing a value of over 3.6 billion USD. Unlike previous short-term selling pressure, this surge in released staking is due to a wave of liquidations triggered by skyrocketing lending rates: when the spread between staking yields and borrowing costs turns negative, many institutions are forced to sell LST liquidity-staked tokens for ETH to repay loans, creating a chain reaction of selling pressure.
However, the dramatic aspect of the market is that the release of staking is not a one-way sell-off. Data shows that during the same period, new staking increased by 360,000 ETH, and institutions like BlackRock and Fidelity saw a net inflow of over 500 million USD in a single day through spot ETFs, directly countering the selling pressure. This pattern of 'release of staking coexisting with accumulation' is essentially a 'chip contest' between Wall Street capital and within the whale community: the bulls attempt to replicate MicroStrategy's control over Bitcoin's pricing power, while the bears use profit-taking strategies to suppress prices.
2. Dual Signals from Technical and Capital Perspectives: The Life-and-Death Race of Bull and Bear Forces
From a technical perspective, ETH has broken below the short-term trend line of $4300, with the RSI indicator falling below the oversold zone at 30, but the MACD has signaled a golden cross, indicating a depletion of downward momentum. The drastic fluctuations in the derivatives market further reveal the intensification of the bull-bear contest: on August 18, a single day saw liquidations of $443 million, with shorts accounting for 64%, and the largest single short position liquidation reached $10.62 million. This phenomenon of short-squeezing is often a precursor to market reversals.
On the capital front, the intensity of institutional layouts far exceeds market expectations. As of August 13, the Ethereum spot ETF's holdings reached 6 million ETH, accounting for 4.96% of the circulating supply, and with institutional reserves, the total holding amount rose to 7.85%. If this ratio increases to 10%, it could theoretically push the ETH price up to $4647; if it reaches 15%, the target price would break $5000. More importantly, the Trump administration recently signed an executive order allowing $8.7 trillion in pension funds to allocate to crypto assets, which injects long-term liquidity expectations into ETH.
3. Historical Reflection: How Capital Power Rewrites Market Scripts
Looking back at the history of cryptocurrencies, the struggle for pricing power often starts with 'violent washouts' but ends with 'epic trends.' BNB experienced a sideways movement between $20 and $30 in 2023, during which Wall Street capital repriced it using US stock valuation logic, ultimately triggering a tenfold surge within weeks. Bitcoin also faced a 30% correction when MicroStrategy continuously increased its holdings in 2024, but subsequently doubled within six months.
The current situation of ETH is strikingly similar to history: short-term selling pressure is a smokescreen for capital layout, while long-term ecological value is the real game-changer. The account abstraction brought about by the Pectra upgrade (EIP-7702) has enabled user wallets to execute contract logic, fundamentally changing the DeFi interaction model; Layer 2 scaling solutions have reduced transaction costs to $0.1 per transaction, pushing daily active addresses to over 970,000. These technological breakthroughs are reshaping ETH's underlying value as 'digital economic infrastructure.'
4. Strategic Advice for Investors: Sow During Panic, Reap During Greed
Gradual Accumulation Strategy: Gradually build positions in the $4200-$4300 range, increasing holdings with every 5% drop to hedge short-term volatility risks.
Long-term Holding Logic: The staking rate has reached 42%, with an annualized yield of 4.8% far exceeding traditional assets, allowing for 'deflation + yield' double dividends when held long-term.
Pay attention to key nodes: The Federal Reserve's Jackson Hole meeting on August 22 may release signals for interest rate cuts; if Powell expresses dovish sentiments, ETH may enter a new round of upward momentum.
Conclusion: This round of correction may be a golden window for capital layout.
When the market panicked due to the release of 850,000 ETH, institutions quietly accumulated by buying more as prices fell. Historical experience tells us that every deep adjustment in cryptocurrency is an opportunity for capital reshuffling. The ecological value of ETH has evolved from a smart contract platform to a global financial infrastructure, and this process has just begun. Follow me for daily market in-depth analysis, and let’s become the ultimate winners in this capital game.
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