ETH broke 4000, I choose to stay out and observe!
Waking up this morning, $ETH has already broken 4100, which is not a good sign, as each integer level represents a psychological battle; going up is difficult, but coming down is easy. Many legendary traders are also clearing their positions, indicating they have sensed the danger.
Looking at the technical chart, ETH's trend indeed looks grim. It has broken the 60-day moving average and is sliding toward the 120-day moving average. Moreover, during the downtrend, there has been almost no substantial rebound, not even a single bullish candle for buying support. This trend shows that market buying sentiment is extremely weak, and the bears have completely taken control of the situation.
On the 4-hour chart, the candlesticks continuously show long upper shadows, with every rebound being suppressed back down. The lows are continuously dropping, from 4450 to 4130 to 4080; the downtrend is unmistakable.
On-chain data is also not optimistic, as both whales and institutions are reducing their holdings.
On the 22nd, Trend Research deposited 16,800 ETH into Binance, nearing a clearing position. On the same day, another large holder sold 3000 ETH on-chain.
Brother Maji's long position in ETH is also showing a paper loss of over 4.5 million dollars. The actions of this smart money tell us that large funds are exiting the market.
Now that 4000 has been broken, the next support is at 3950, and it may even be 3800. If the bulls retaliate, they need to break through 4200 with volume for a decent rebound to be possible.
But for us small retail investors, there's no need to take risks guessing the bottom. So I choose to stay out here and wait for clear signals.
Those currently trapped should either add margin (provided your risk is controllable) or wait to cut losses after a rebound.
Once this round of washout is over, ETH should be able to return above 4000. But before that, we need to see clear signs of a stop in the decline: such as a strong bullish candle with volume, or a bottom engulfing pattern, etc.
The Federal Reserve's policy expectations and the overall market volatility also exacerbate the uncertainty of ETH. Tomorrow, there will be BTC options worth approximately 5.8 billion dollars expiring, which could lead to an increase in market volatility.
So for those looking to catch the bottom, please be a little more patient; the market is not short of opportunities!
