1. Bullish strength but overbought risks accumulating
- ETH has risen over 3% today, breaking through the key resistance level of $3700, indicating a clear short-term bullish trend.
- Technical conflicting signals:
- Positive signal: The 4-hour candlestick shows a 'bullish engulfing' pattern, trading volume is rising simultaneously, and the MACD histogram shortening indicates increased strength among bulls.
- Risk signal: RSI has exceeded 70, entering the overbought zone, indicating a possibility of a pullback; partial periods show price-volume divergence (price increases but volume decreases), reflecting weakened upward momentum.
2. Bearish crisis and institutional arbitrage risks
- Recently, retail investors' high leverage in long positions has driven up demand for perpetual contracts, while institutions profit from the strategy of 'shorting perpetual contracts + holding spot to hedge' (annualized can reach 10.5%).
- Potential crash risk: If funding rates turn negative or the market shifts, institutional arbitrage exits could trigger a sudden liquidity drop, leading to a chain of liquidations. ETH has a higher leverage ratio, so the downside risk may be greater than BTC.
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📊 Operation strategy and key price levels
🟢 Bullish strategy (cautious participation, strict stop-loss required)
Entry timing and price levels:
- Ideal support zone: $3550-$3580 (daily MA7 moving average + previous high turning support), can build positions in batches.
- Aggressive long position: If it holds above $3700 and breaks through $3715 with volume, a small position can be followed, targeting $3775-$3800.
- Target profit-taking position:
- Short-term target $3640-$3684 (previous high resistance).
- Look for $3775-$3800 after breaking $3715.
- Stop-loss setting: Below $3540 (below the support level) or stop-loss at 3%-5% of position.
🔴 Bearish strategy (high risk, suitable only for short-term experts)
Entry timing and price levels:
- Short in the resistance zone: $3715-$3775 (Bollinger Bands upper band + previous high pressure), build positions in batches at highs.
- Overbought signal confirmation: Enter when RSI > 70 and a long upper shadow candlestick appears.
- Target profit-taking position:
- First target $3600-$3580 (4-hour MA30 moving average).
- Second target $3500-$3460 (daily neckline).
- Stop-loss setting: Break above $3780 or stop-loss at 3%-5% of position.
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⚠️ Key risk reminders and hedging suggestions
1. Leverage risk:
- Current retail long leverage ratio is extremely high; a pullback could trigger a cascade. Avoid high leverage (recommended ≤5x).
2. Whale and institutional movements:
- A certain whale/institution accumulated 47,121 ETH (about $174 million) through FalconX within 24 hours, which may support mid-term prices.
- However, be wary of arbitrage institutions selling off: Trader AguilaTrades closed part of the ETH short position (losing $1.1 million) but still holds 50,000 ETH in short positions, with a floating loss of over $7 million.
3. Event-driven risks:
- The UK Treasury plans to sell £5 billion in BTC, and changes in US regulatory policies and other macro events may affect ETH.
--💎 IV. Comprehensive recommendations
- Short-term (1-3 days):
- Bullish: Wait for a pullback to the $3550-$3580 range to buy low, stop-loss below $3540, target $3640-$3700.
- Bearish: Test short positions in the $3715-$3775 range, stop-loss above $3780, target $3600-$3550.
- Medium-term (1 week):
- If it holds above $3700 and funding rates do not worsen, long positions can be held until $3800; if it breaks down with volume below $3540, consider a bearish outlook.