$ETH From the daily level, the current technical signals and market structure of ETH show a brewing potential for 'violent pullback after extreme overbought', which may even trigger a 'black swan waterfall'. The core logic is dissected as follows:
1. Extreme overbought signal: Indicators collectively warn
1. RSI severely overbought (84.90)
- Daily RSI1 breaks above 80, and all three lines (RSI1/2/3) are above 70 in the overbought range. Historically, this situation occurs with over 90% probability of at least a 20% pullback (refer to the top of the bull market in 2021 and the pullback after ETH broke above 4000 in 2024).
2. KDJ severely blunt (J value 110.27)
- KDJ's J value has been blunt since breaking 100, indicating that short-term bullish strength is severely overdrawn and has lost elasticity. Once it turns down, it will trigger a chain stop-loss reaction (similar to a spring being compressed to the limit before rebounding).
3. MACD top divergence prototype
- Price hits an all-time high ($4349), but the MACD red bar area has significantly narrowed (compared to the main upward wave in mid-July), and the difference between DIF (237.87) and DEA (202.66) is slowing down, indicating 'volume-price divergence'—the upward trend relies on capital pushing rather than real buying support.
2. Market structure: Doubling market + no pullback, accumulating huge profit positions
From $2370 on 2025/7/07 to the current $4349, an increase of over 83% within 45 days, and there has never been a daily level decline of more than 2 days (at most sideways for 1-2 days before continuing to rise). This kind of 'short squeeze-style increase' has led to:
- Retail investors generally chase high prices (fear of missing out), with holding costs concentrated in the 3800-4200 range;
- The main force has extremely rich profits (the bottom chips have almost doubled), and may 'smash the market for harvesting' at any time.
3. Trigger conditions for the 'black swan waterfall'
1. Key support breakdown: Daily MA5 ($4107)
- If the price effectively breaks below the daily MA5 (current 4107), it will trigger:
- Technical stop-loss (breaking below short-term trend line);
- Profit-taking (worrying about profit reversal);
- Leverage long positions being liquidated (a chain liquidation in the futures market).
2. Emotional transmission: Small-level breakdown triggers panic
- If the 4-hour chart also breaks below 4200 (previous high support), it will strengthen the expectation of 'daily top' and lead more funds to short;
- If it falls below the 3800-3900 range (daily MA10 + previous platform), it will confirm a 'bull market pullback', and the decline may expand to over 30% (retesting daily MA20, currently 3783).
4. Operational warning: Respect the lethality of extreme overbought
Need to be cautious:
- Lure before the waterfall: The main force may first break above 4400 before creating a new historical high, completely stimulating retail investors' enthusiasm to chase high prices, and then turn around to smash the market (a typical 'bull trap');
- Leverage risk: The waterfall in the futures market is often accompanied by 'spikes' (instant explosion of long/short positions), it is advisable to trade with light positions or wait for the daily MACD death cross + RSI to break below 70 before entering the market.
Summary: Extreme overbought at the daily level + no pullback structure hides the risk of a 'black swan waterfall'. Historical patterns indicate that such pullbacks after a short squeeze are often 'fast, fierce, and accurate'—once a breakdown occurs, a decline of 15-20% within 1-2 days is not uncommon. But before that, the main force may continue to squeeze and lure (for example, hitting 4500), requiring flexible responses based on small-level signals, and do not blindly guess the top/bottom.
