Ethereum's crypto storm: Opportunities hidden in crisis, 4280 is the key to breaking the situation!
“Others fear my greed, others are greedy while I fear,” in the ever-changing landscape of the cryptocurrency market, this saying acts like a guiding light, reminding us to stay alert amidst the waves of panic and greed. Currently, the ETH market is permeated with a strong atmosphere of fear, but don’t panic; behind this actually lie numerous opportunities, it just depends on our ability to seize them!
The current state of ETH under market panic
Recently, the cryptocurrency market has experienced a severe downturn, suffering across the board. ETH has dropped by 4.79%, directly falling below 4100 USD; Bitcoin hasn’t fared much better, down 2.69%, dipping below the 113,000 USD mark. In the past 24 hours, it has been a 'bloodbath' across the network, with 151,458 people liquidated, resulting in a total liquidation amount of 560 million USD, of which long positions accounted for 463 million USD and short positions 100 million USD. This data is enough to make one’s heart race.
Why is the market so panicked? It’s actually due to a series of events. The US inflation data acts like a ticking time bomb, making people feel uneasy; the Federal Reserve's policies are shrouded in uncertainty; coupled with the recent significant pullback of ETH, it's like going down a slide, investors can’t help but feel anxious.
4280 USD: The 'Chuhan River' of the long and short battle
From a technical analysis perspective, ETH is currently at a critical crossroads. The 4280 - 4300 range acts like an insurmountable city wall, which is the current strong resistance level; while the 4200 - 4170 range can provide initial support for the price, with more critical support at the psychological levels of 4060 and 4000 USD.
For example, this is akin to a tug-of-war match, with bulls and bears exerting their strength. If ETH’s price cannot break through the 4280 USD 'hurdle,' it may very well slide down again to retest the 4060 support level, or even the psychological barrier of 4000 USD. If it can't hold 4000 USD, the next important support will be around 3900 USD.
However, if ETH can break through and firmly stay above 4280 USD, it would be a different story. It’s like a tug-of-war competition where one side suddenly exerts force, pulling the other side over the line; this wave of correction may end, and ETH might challenge the resistance zone of 4400 - 4571 USD again.
Just like before, ETH was also hovering around a critical resistance level, when many thought a breakthrough was hopeless. Suddenly, the bulls exerted force, breaking through, and the price soared, leaving those who were bearish regretting it deeply. Therefore, in the market, anything is possible.
US stock market opening: The 'butterfly effect' of traditional financial markets
The opening of the US stock market significantly impacts the cryptocurrency market. Why do I say this? Because many institutional investors are like 'walking on two boats,' participating in both the traditional stock market and the cryptocurrency market. Their risk preferences manifest in both markets simultaneously. Moreover, in recent years, the relationship between cryptocurrencies and US tech stocks has been highly correlated, akin to close brothers. Whenever the Nasdaq index has any fluctuations, the cryptocurrency market is sure to sway along.
There are several key events to focus on this week. Federal Reserve Chairman Powell is set to speak at the Jackson Hole Economic Symposium, akin to a mysterious 'magic show,' with everyone waiting to see what 'policy magic' he can conjure. Furthermore, the FOMC meeting minutes and US unemployment claims data are about to be released, which will serve as the 'compass' for the market, directly influencing investor sentiment. In addition, expectations for a Fed rate cut in September have dropped from over 90% to 82% on Tuesday, adding uncertainty to the market.
On-chain data and institutional movements: Undercurrents are surging
On-chain data acts like the market's 'secret diary,' providing us with a wealth of useful information. The number of Ethereum validators exiting the queue has risen to a historical high of 927,000 ETH, resembling a 'great retreat.' During market adjustments, large exits often exacerbate market sentiment.
However, the situation on the institutional side is a bit complex, showing contradictory signals. On one hand, institutions have reached a historical high in short positions on ETH through CME futures, seemingly indicating a lack of optimism toward ETH; on the other hand, American ETH ETFs are steadily increasing their holdings, suggesting that some institutions still have confidence in ETH.
This division is like a 'tug-of-war,' creating tension between spot demand and futures positioning. If ETH can hold its current level and begin to rise, it may trigger a 'short squeeze,' forcing some short positions to quickly close, thereby increasing bidirectional price fluctuations.
Evening operation strategy: Steady and cautious, control risks
Based on the above analysis, we need to be cautious in our operations tonight. If the price does not break through the 4280 resistance level, consider taking a light short position near the 4230 - 4250 area, setting the defense level above 4280, with the target initially looking towards the 4100 - 4130 region. If it breaks below, then look towards the 4060 - 4000 area.
If the price breaks through 4280 and stabilizes, then one could consider taking a small position to go long, targeting the 4400 - 4571 region. However, risk control must not be forgotten, as it is of utmost importance. Given the current market's extreme volatility, it’s like sailing in a stormy sea; position sizes must be controlled within one's tolerable limits, and stop-losses must be set, or one might be overturned by the market's 'big waves' with one careless move.
ETH is now like an adventurer testing the edge of a cliff, every step is crucial. If the market sentiment improves after the US stock market opens tonight, and ETH breaks through the 4280 USD resistance, it could likely embark on a rebound journey towards the 4400 - 4571 USD region. However, if the US stock market continues to decline and market sentiment worsens, ETH may retest the key support levels of 4060 or even 4000 USD.
The market is like a mysterious maze, filled with countless possibilities and challenges. Do you want to lose your way in panic, or find an opportunity amidst the crisis, becoming the one who laughs last in the crypto market? Follow me, and let's explore the secrets of the cryptocurrency market together, unlocking more wealth codes!
