Last night at 20:30, the U.S. PPI data was released, and inflation pressures exceeded expectations! The market reacted violently—ETH instantly entered waterfall mode, plummeting from $4,740 straight through the $4,500 support, hitting a low of $4,450, evaporating nearly $300 in half an hour, leaving leveraged long positions devastated.

But the bulls did not give up! After the crash, funds quickly bought the dip, and at 22:20 the price surprisingly rebounded strongly to a high of $4,700, resulting in a miraculous V-shaped reversal! Just as the market took a breath, Fed official Musallem's speech dealt a fatal blow to the bulls:

"A 50 basis point rate cut does not align with current economic data" (directly shattering the fantasy of a significant rate cut in September)
"Inflation is still close to 3%" (acknowledging that stubborn inflation is not eliminated)
"It is too early to decide on the September interest rate resolution" (implying no hope for a policy shift)

Before the words were even out, ETH plunged, crashing through $4,500 again at 5:30 AM, with a 24-hour decline exceeding 5.4%. This slaughter directed by 'inflation data + Federal Reserve hawkishness' caused countless latecomers to get liquidated overnight!

Dissecting the crash: A dual strangulation of news and technicals

Chain of explosive news

  1. PPI inflation adds fuel to the fire:
    The producer price index (PPI) released last night exceeded expectations, confirming that inflationary stickiness is beyond expectations, prompting traders to urgently lower their bets on a rate cut in September, with the dollar strengthening and suppressing risk assets.

  2. The Federal Reserve's 'hawkish language' strike:
    Musallem explicitly opposes a 50 basis point rate cut in September, stating that "the labor market faces downside risks and requires policy balance", completely extinguishing market optimism. He emphasized that "inflation is affected by tariff transmission and may persist for 6-9 months," further suggesting that rate cuts may not come quickly.

  3. On-chain alerts had already shown signs:
    Before the crash,if ETH falls below $4,340, it will trigger $2.169 billion in short liquidations, putting immense liquidation pressure on short sellers. Meanwhile, Binance monitored a large transfer ofover 34.78 million USDT, suspected to be institutions preparing to buy the dip, with a tug-of-war brewing between bulls and bears.

Key technical structure has broken

  • The ascending channel has broken: Previously, ETH maintained an ascending channel on the daily chart (support at $4,723), but after the PPI data, it directly broke through the VWAP support area ($4,720-4,746), triggering multiple stop-losses.

  • Bearish engulfing pattern confirmed: The daily chart shows a classic bearish engulfing candlestick, and the MACD histogram has turned green and negative, with all short-cycle EMA supports lost, indicating a technical shift to bear dominance.

  • Liquidity hunting logic: The $4,870 resistance zone has a large number of sell orders, while the $4,450-4,500 area has high liquidation density, becoming the main battlefield for bears.

Deep Tide TechFlow monitoring shows: During the crash, the funding rate remained positive (Binance 0.01%), indicating that retail investors were holding their positions against the trend, laying hidden dangers for subsequent declines.

Today's decisive battle: 4615 is the life-and-death line for bulls and bears!

Currently, ETH is temporarily at $4,600, today's operations need to closely monitor two key levels:

  1. Bullish counterattack signal:
    If the hourly chart stabilizes above $4,615, it is expected to retest the $4,620-4,660 pressure zone (4H mid-track resistance). A breakthrough would open up rebound space, targeting a return to $4,700.

  2. Conditions for continuation of bears:
    If $4,615 is under pressure and breaks down with volume below $4,450, it will trigger a chain liquidation, and prices may slide towards the strong support zone of $4,300-4,400 (daily EMA50 + weekly Bollinger mid-track).

Operation strategy: Strictly maintain discipline and hunt for volatility!

  • Aggressive: Go long after breaking and retesting 4615, targeting 4660→4700, stop-loss at 4580.

  • Conservative: Gradually build long positions in the $4,450-4,480 area, betting on a second rebound, with a stop-loss at $4,420.

  • Risk warning: Focus on U.S. retail sales data tonight! If it exceeds expectations again, it may trigger a new round of selling pressure.

Moment of truth: The ETH weekly upward trend remains unbroken, but the daily chart has entered an adjustment cycle. A sharp drop in a bull market is an opportunity, but strict position management is essential—leverage is the devil, and stop-losses are lifesavers!

Are you particularly curious about where ETH will go next? Will it continue to plummet or rebound strongly? Also, has the ETH/BTC exchange rate hit the bottom? What coins are the whales secretly hoarding that could surge? In the next issue, I will reveal it in depth. Follow me for insights and let’s navigate the K-line fog from the institutional perspective, making a fortune in the crypto world!