Ethereum's 'double kill' night, who is behind the scenes washing the market?
"In the cryptocurrency market, when you think you're buying the dip, you're actually getting liquidated; when you think you're escaping the peak, you're actually taking over the loss." This saying was vividly demonstrated in last night's Ethereum market. Countless contract traders saw their funds in their accounts vanish like a flood after a dam break while they were asleep.
Last night's market: a thrilling roller coaster ride
Last night's Ethereum market was like a wild roller coaster ride. In the early morning, it surged to a historic high of $4,957, making the bulls ecstatic, as if they saw the door to financial freedom opening for them. But who would have thought this was the calm before the storm? The price then retraced to around $4,520, and many thought it was a good opportunity to buy the dip, jumping in. The price did rebound to $4,690, giving everyone a glimmer of hope. However, it didn't last long; at 3 AM, the price plummeted like a kite with a broken string, hitting a low of $4,330. This wave of action led to a large number of long positions being liquidated, with millions in funds evaporating in an instant, leaving countless traders with zero balance.
Technical analysis: the retracement had long been foreseen
From a technical perspective, this wave of retracement in Ethereum actually had its signs early on. Although the daily chart shows an upward trend, the 4-hour chart has formed a pattern of high-level consolidation. After hitting a historic high, the price encountered significant selling pressure, which is a typical technical retracement. The MACD on the 4-hour chart shows weakening momentum, like a car speeding down the highway that is running out of power and naturally needs to slow down. Although the short-term trend indicator EMA is bullish, it is still far from the EMA120, like a person standing too high with a risk of falling, indicating a need for a pullback. The RSI (30 minutes) is at a level of 39.8, clearly indicating a bearish momentum. These technical indicators are like traffic lights, all signaling that a price retracement is inevitable.
Whale movements: the layout of smart money
On-chain data is like a mirror, reflecting the real situation of the market. According to observations from on-chain analysts, several long-dormant bitcoins have recently been exchanged for ETH by whales. The awakening of these 'sleeping funds' is no small matter. This often indicates that institutional investors or high-net-worth players have their own structural judgments about the market, and they are not short-term trading retail investors but rather have long-term plans and layouts. Just like a well-known investment institution that bought heavily during Bitcoin's low price period and held for the long term, later profiting immensely when Bitcoin's price surged. This time, even though ETH has risen over 300% in four months, the whales still haven't slowed down. The continuous decline in exchange ETH balances indicates that a large number of tokens are being withdrawn into cold wallets. It's like everyone is scrambling to buy a product, and the merchant has fewer and fewer goods, leading to an intensified 'supply shock' in the market, which may also affect prices.
Double kill: a classic dealer's tactic
In this wave of market activity, the dealers' 'double kill' strategy played out smoothly. Data shows that if Ethereum breaks through $5,000, the cumulative liquidation strength of short positions on major trading platforms will reach $544 million; conversely, if Ethereum drops below $4,500, the cumulative liquidation strength of long positions will reach $2.512 billion. The dealers took advantage of this, first pushing the price up to $4,957 early yesterday morning, instantly liquidating a large number of short positions and causing significant losses for shorts. Then, the price fell back to $4,520, attracting many bulls to buy the dip. Just when the bulls thought the opportunity had come and entered the market, the price rebounded to $4,690 before plunging again, hitting a low of $4,330 this morning, liquidating a large number of long positions. This kind of operation is like a skilled magician, creating false breakouts to lure traders, then reversing the operation to achieve a win-win for both sides. It's like a certain altcoin; the dealer first raised the price to attract retail investors, then suddenly sold off, causing the price to crash and leaving retail investors stuck at a high.
Personal opinion: market risks and opportunities coexist
In my opinion, the cryptocurrency market is a place full of opportunities and risks. Although this wave of Ethereum's market caused significant losses for many, it also reminds us that we cannot blindly follow the trend in this market; we must have our own judgment and analysis. As Buffett said, "I am fearful when others are greedy, and greedy when others are fearful." When the market is in a frenzy, we must remain calm and vigilant against risks; when the market is sluggish, we must also see the opportunities within. Of course, this does not mean we should blindly go against the trend; rather, we should make reasonable decisions based on a thorough understanding of market conditions and technical indicators.
Today's strategy: key positions and risk control points
According to the current technical analysis, today's trend needs to focus on whether the critical level of $4,420 can hold. If the hourly chart can stay above this level, we can consider taking a rebound. Aggressive traders can short at the current price with a light position, but they must set a stop-loss at $4,480, aiming for around $4,200. Conservative traders are advised to wait for the hourly close to decide on their entry direction. From a larger timeframe perspective, as long as ETH's weekly closing price holds above $4,600, it may further rise to $5,200 to $5,500. The medium-term support is around $4,100, and if a dip occurs, it may rise again afterward.
Ethereum's current price near $4,430 is at a critical decision point, with resistance forming in the $4,480 - $4,500 range above and support at the $4,200 - $4,150 range below. The market is still digesting the recent gains, and short-term volatility remains high. Traders must strictly control their position sizes and set stop-losses to avoid becoming casualties of the next wave of liquidation. After all, in this brutal market, surviving is more important than making money.
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