I. The Transmission Logic of Geopolitics on Cryptocurrency.

Cryptocurrency is easily influenced by 'risk sentiment' in the short term:

  1. Risk aversion sentiment is rising: When geopolitical conflicts escalate, investors often sell risk assets and turn to safe-haven assets like gold, the US dollar, and US Treasuries. As a high-risk, high-volatility crypto asset, ETH is likely to be sold off first, leading to a price decline.

  2. Liquidity contraction expectations: If geopolitical conflicts trigger market concerns about 'economic recession and monetary tightening,' global risk appetite will further decline. The crypto market relies on 'liquidity-driven' movements, and once macro liquidity tightens, ETH will also face selling pressure.

II. Technical Perspective: Looking at the ETH/USDT 1-hour chart for signals of decline.

The technical features observed in the chart can also explain 'why it is falling':

  1. Trend Break and Moving Average Suppression:

    • As can be seen in the chart, ETH previously surged to around 3083 before falling back, breaking below the short-term ascending trend line. The moving averages have shifted from a 'bullish arrangement' to 'flattening or even turning downward,' indicating that short-term bullish momentum has weakened, and bears are starting to dominate.

    • When the price cannot hold above key resistance, it will trigger profit-taking sell-offs, leading to a chain reaction of declines.

  2. Volume and Indicator Coordination:

    • If the decline is accompanied by 'increased volume,' it indicates a strong willingness to sell; if it is a 'decreased volume decline,' it may indicate a phase of consolidation. However, in the context of geopolitical conflicts and sudden news, increased volume declines are more likely to be a result of 'panic selling + profit-taking.'

    • Additionally, from the perspective of the Bollinger Bands, the price has fallen to the middle or even lower band, indicating that short-term bearish momentum is dominant. If the channel opens further downward, it will reinforce the downtrend.

    • If you don’t know how to analyze the technical aspects or how to look for specific levels, find Zhuque, who will guide you step by step.

III. The Resonance Decline of 'Geopolitical Events + Technicals.'

Returning to the news you mentioned about 'Patriot missiles being sent to Ukraine':

This falls under sudden geopolitical negative news, directly impacting market risk appetite. The crypto market, due to its global participants and high leverage, often reacts more violently to such 'black swan' or 'grey rhino' events—when the news breaks, many traders will choose to 'reduce positions to hedge,' causing selling pressure to amplify instantly.

Moreover, the technicals themselves are already in a phase of 'high-level correction + weakening trend.' The geopolitical negative news has become 'the last straw that breaks the camel's back,' accelerating the selling pressure from funds that already had profit-taking needs, ultimately reflected in a significant decline on the 1-hour chart.

IV. Zhuque's View: The short-term decline of ETH is a result of 'multiple factors resonating.'

  1. Fundamentals: Geopolitical conflicts escalate → Risk appetite declines → Crypto assets are sold off;

  2. Technical Aspects: After an early surge, the trend weakens + breaking key resistance → triggers profit-taking and panic selling;

  3. Sentiment: Sudden negative news shifts market sentiment from 'hesitation' to 'panic,' accelerating the decline.

To determine the subsequent trend, attention must also be paid to:

Whether there are further signals of escalation or de-escalation in geopolitical conflicts;

The macro-level transmission of risk assets;

ETH's own on-chain data and the progress of catalysts like ETH ETFs.

Short-term fluctuations are largely influenced by news, while mid to long-term trends depend on the fundamentals of the crypto ecosystem. For short-term trading, fluctuations triggered by geopolitical events are often quite intense, requiring strict risk control. For mid to long-term allocation, more attention should be paid to the ecological value of ETH and the macro cycle.

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