Market Plunge! ETH Drops Below $2K, Is the Bull Market Over or Just a Temporary Adjustment?

Although the news of the U.S. establishing a strategic crypto reserve was seen as a significant positive, the market did not rally but instead faced severe adjustments. ETH dropped below $2,000, BTC also saw a substantial pullback, and altcoins collectively plummeted. In light of such a market, is this a signal that the bull market has ended, or is it just a brief adjustment?

Why Did the Market Crash?

🔹 News Realization is Bearish: Although the news of the U.S. government establishing a crypto reserve is bullish in the long run, the market may have already priced it in short-term, leading to a phenomenon of “profit-taking after good news.”

🔹 Concerns Over Liquidity Tightening: The Federal Reserve's monetary policy remains unclear, and market expectations for interest rate cuts continue to fluctuate, resulting in increased risk aversion.

🔹 High Leverage Liquidated: Recently, market leverage has been high; after ETH broke key support, chain liquidations accelerated the decline.

🔹 Bitcoin High-Level Adjustment: BTC faced resistance around $80,000, and the market's short-term profit-taking sentiment intensified, leading to an overall market pullback.

Technical Analysis of ETH

📉 ETH broke below $2,000, short-term weakness

• On the hourly level: ETH has entered a downward channel, with insufficient volume and weak rebounds.

• On the daily level: MA moving averages are flattening, and MACD shows a death cross, with short-term risks of further declines.

• Key support levels: $1,900 – $1,850. If it continues to drop below this, it may enter deeper adjustments.

Is the Bull Market Over or Just a Temporary Adjustment?

✅ Bull Market Structure Still Exists: Although there is a short-term pullback, the overall trend remains intact. As long as BTC holds between $72,000 – $75,000, the market still has a chance to recover.

✅ Policy Still Favors Positivity: The U.S. government's reserve of BTC indicates long-term recognition of crypto assets, which will not change the overall upward logic of the market.

❌ Short-Term Panic Sentiment: Market risk aversion is increasing; if BTC once again drops below key support, it may enter a larger-scale adjustment.

Operational Recommendations

⚠️ Short-Term: Cautious Observation, Awaiting Signals

• Only consider entering if ETH stabilizes above $2,000; if it drops below $1,900, beware of further declines.

• If BTC maintains $75,000, the market still has a chance to recover; if it drops below $72,000, the adjustment may deepen further.

🔥 Conclusion: Short-term volatility is intensifying, the bull market is not dead, but one must be wary of the risk of deep adjustments!