In the early morning of August 26, ETH staged a 'flash crash': from 4690 USD to 4311 USD, 210,000 people liquidated, 1.047 billion USD evaporated. Was it a technical correction or bad news? Understanding the logic is key to knowing whether it’s a rebound or a continued drop.
I. Technical warnings have long been present: 4295 lost, bears in control
The crash is not sudden, 4-hour chart signals had already hidden risks:
4295 becomes the 'line of life and death': previously tested three times with rebounds, after being broken in the early morning, triggered programmatic sell orders + leveraged liquidations, now 4295 has turned from support to resistance, to warm up it needs to recover first;
Trend line collapse: The descending trend line connecting 4680 and 4515 was broken, the fluctuation ended, bears dominated;
Indicator shows red light: BOLL breaks below the lower band, 20-day EMA becomes resistance, RSI drops to 27 (oversold but hasn't stopped falling), short-term enters 'bear market mode'.
II. Triple negative news: The last three straws that crushed ETH
The plunge is a resonance of technology + news:
Fed rate cut expectation reversal: After Powell's speech, the probability of a rate cut in September dropped from 98% to 15%, the core logic of 'liquidity easing' for ETH's rise has cooled down;
ETF Fund Withdrawal: ETH ETF had a net outflow of 196.6 million USD this week, reversing last week's inflow of 2.8 billion, institutions took profits and shattered confidence;
Regulatory pressure: Hong Kong (stablecoin regulations) implemented, SEC delays approval of altcoin ETFs, Nasdaq down 0.9%, ETH drops in tandem.
III. Exclusive Judgment: Short term looks at 4295, long term still expects 8000
Don’t rush to cut or scoop, view by cycle:
Short term (within 1 week): If 4295 can recover + rebound volume exceeds 250 million/hour, look for 4450-4550; if it can't hold, it may test 4000 (institutional cost zone, likely to have support), key to watch for Fed rate cuts in September;
Long-term (3-6 months): Fundamentals hold steady, 8000 is not a fantasy - institutions like BlackRock still add positions, EIP-5005 upgrade improves efficiency, and falling US Treasury yields highlight ETH's allocation value.
IV. Operational Suggestions: Short-term trial and error, long-term phased investment
Short-term: Lightly try long positions near 4295, stop loss at 4150, target 4450-4550 for profit-taking, don’t be greedy;
Long-term: Can buy spot in phases or participate in staking (annualized 3%-4%), current NVT ratio shows ETH is undervalued;
Everyone pay attention: Don’t open high-leverage contracts, 10x leverage is easy to liquidate, prioritize preserving capital.
V. Ultimate Question: Will ETH become the 'Crypto Nasdaq'?
Short-term plunge does not change long-term trend: Institutional participation (ETF holding 832,000), ecosystem (DeFi locked 80 billion), policy (EU categorizes as 'technical assets') are all stronger than in 2021. This round feels more like a 'bull market correction', if 4295-4000 stabilizes, Q4 is likely to return to 5000, and 8000 in 2026 is possible.
Let's chat in the comments: Do you think ETH can hold 4000? Follow me for rebound signals and institutional movements, avoid pitfalls and seize opportunities.
