In the cryptocurrency market, you think you are bottom-fishing, but you are actually being liquidated; you think you are escaping the top, but you are actually stepping in. This saying was vividly illustrated in last night's Ethereum market. Countless contract players, in their sleep, found their account funds swept away like floodwaters after a dam burst.

Last night's market: A thrilling roller coaster

Last night's Ethereum market was like a crazy roller coaster. In the early hours, it surged to a historic high of $4957, exciting the bulls 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 pulled back, and when it approached $4520, many thought it was a good opportunity to buy the dip and rushed in. The price did indeed bounce back to $4690, giving everyone a glimmer of hope. However, it was short-lived; at 3 AM, the price plummeted like a kite with a broken string, hitting a low of $4330. This wave of operations directly liquidated a large number of long positions, evaporating millions of funds in an instant, causing countless people to face liquidation.

Technical perspective: The pullback was long anticipated

From a technical perspective, Ethereum's recent pullback has long been signaled. The daily chart shows a trend of fluctuating upward, but the 4-hour chart has already formed a pattern of high-level consolidation. After reaching a historical high, the price faced significant selling pressure, which is a typical technical pullback. The 4-hour MACD momentum is weakening, like a car driving fast but losing power, naturally needing to slow down. The trend indicator EMA is short-term bullish, but is far from EMA120, like a person standing too high with a risk of falling, indicating a need for a pullback. The RSI is at 39.8, clearly in a bearish momentum. These technical indicators are like traffic lights, all telling us that a price pullback is inevitable.

Whale movements: The layout of smart money

On-chain data is like a mirror, reflecting the true state of the market. According to observations by on-chain analysts, several long-dormant Bitcoins have recently been exchanged for ETH by large whales. The awakening of these 'sleeping funds' is no small matter. This often represents institutional investors or high-net-worth players having their own structural judgments on the future market; they are not short-term retail traders but have long-term plans and layouts. Just like a well-known investment institution previously bought a large amount of Bitcoin and held it during a downturn, later reaping huge profits when Bitcoin prices soared. This time, even though whales have exchanged for ETH, which has risen over 300% in four months, they have not slowed down. The continuous decline in ETH balances on exchanges indicates that a large number of tokens are being withdrawn to cold wallets. It's like everyone is scrambling to buy a product, and the stock in the merchant's hand is dwindling, intensifying the market's 'supply shock,' which may also affect prices.

Double kill: The classic strategy of the dealer

In this wave of market activity, the dealer's 'double kill' strategy was executed flawlessly. Data shows that if Ethereum breaks above $4900, the cumulative short liquidation intensity on major trading platforms will reach $544 million; conversely, if Ethereum falls below $4500, the cumulative long liquidation intensity will reach $2.512 billion. The dealer used this to first push the price up to $4957 in the early hours yesterday, instantly liquidating a large number of shorts and causing heavy losses for the bears. Then the price fell back to $4520, attracting a large number of bulls to buy the dip. Just when the bulls thought the opportunity had come and rushed in, the price bounced to $4690 before plummeting again, hitting a low of $4330 this morning, liquidating a large number of long positions. This kind of operation is akin to a skilled magician, creating false breakouts to entice traders, then executing reverse operations to profit from both sides. Just like a certain altcoin, the dealer first raised the price to attract retail investors to follow suit, then suddenly sold off, causing the price to crash and trapping retail investors at a high.

Market risks and opportunities coexist

In my opinion, the cryptocurrency market is a place filled with opportunities and risks. Although Ethereum's recent market has caused heavy losses for many, it also reminds us not to blindly follow the crowd in this market and to 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 euphoric, we must remain calm and vigilant against risks; when the market is sluggish, we must also see the opportunities within. Of course, this doesn't mean we should blindly go against the trend, but rather 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 key level of 4420 can hold. If the hourly chart can stay above this level, we can consider taking a rebound. Aggressive traders can go short with a small position at the current price, but must set a stop-loss at 4480, aiming for around 4200. Cautious traders are advised to wait for the hourly close before deciding on the entry direction. From a larger timeframe, as long as ETH's weekly close price holds above $4600, it may further rise to between $5200 and $5500. The mid-term support is around $4100, and if a downward spike occurs, it may rise again thereafter.

Ethereum is currently at a critical decision point around the price of 4430. The resistance is formed in the 4480 - 4500 range above, while the support is provided in the 4200 - 4150 range below. The market is still digesting recent gains, and short-term volatility remains high. Traders must strictly control their position size, set stop-losses, and avoid becoming victims of the next liquidation wave. After all, in this brutal market, surviving is more important than making money.

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