Last night's cliff-like plunge of ETH had many people staring at the K-line until dawn, only to watch their positions explode and their capital evaporate? Don't panic! This seasoned trader has dissected the market - why it fell, how it will move tonight, and how to watch key levels, all explained in plain language to help you avoid the big drop trap!
1. The crash is not accidental! News + technical double kill, early warnings were already in place
1. The news of a black swan attack, large funds run away first
Last night, just as the market was warming up, suddenly two 'bad news bombs' exploded:
SEC is stirring things up again: The US SEC has announced a thorough investigation of DeFi platforms, and as soon as this news broke, large funds panicked - considering that in previous SEC investigations, related cryptocurrencies fell by over 20%, no one wants to be the 'greater fool', so they sold off overnight, with ETH taking the lead in the plunge.
Middle East situation adds chaos: Geopolitical conflicts escalate, risk-averse funds are withdrawing from the high-risk cryptocurrency market, Bitcoin couldn't hold up first and fell, and ETH, already affected by DeFi bad news, is now dragged into a 'plunging vortex', dropping over 5% within an hour, turning the crypto market into a bloodbath.
2. The technical side has already sounded the alarm, it's just that many people didn't understand it
In fact, before the crash, 4 technical signals had already been 'crying for help', but unfortunately, many retail investors didn't take it seriously:
Key level directly collapsed: 4140, this previous strong support level, was directly smashed through by a big red candle, without even a struggle, equivalent to 'the defensive gate' being breached, leaving no buffer for subsequent declines;
Moving averages collectively 'kneel': The yellow, purple, and gray key moving averages have all changed to a downward trend, with prices being firmly pressed below the moving averages, without even the strength to rebound;
MACD death cross gaining strength: Not only has a death cross signal appeared, but the green bars are also continuously expanding, indicating that the bearish energy is 'holding back a big move', and there's no sign of stopping the decline;
Bollinger Bands lock in a decline: The Bollinger Bands are opening downward, and prices are being squeezed near the lower band, wanting to rebound? First, break through the 'pressure wall' of the Bollinger Bands before talking.
2. Tonight's life-and-death battle: 3883 is the final defense line, breaking it = market crash warning
Currently, ETH is barely 'catching its breath' around 4080, but this is only temporary - whether tonight can maintain the principal depends entirely on 3883, this key level!
1. Upper pressure: 4140 becomes the 'rebound ceiling'
Don't think that 4140 was a support level; it has long since changed! After breaking last night, it has now become a 'resistance level': as long as the rebound cannot break through 4140, it means the buying power is fundamentally weak, and ETH is very likely to turn around and continue to fall, possibly even more severely.
2. The life line below: 3883 must not be broken!
3883 is not an arbitrary number, but a 'dense transaction area' for retail and institutional investors - if it can't hold here, the consequences are unimaginable:
If the volume breaks below 3883, it will directly trigger a 'panic selling wave': anxious retail investors will follow suit and sell off, and by then no one will be able to catch it, ETH could plunge straight to 3800, or even below 3800.
Focus on trading volume! If you see a 'big red candle + soaring volume' at the 3883 level, don't hesitate, immediately stop loss and exit; if you run slowly, your principal might be cut in half.
3. The main players haven't hidden! The hanging order data is all 'runaway signals'
Many people ask 'can we buy the dip now?'; just look at the hanging order data on the right to understand, the main players have already laid out the 'trap':
Sell orders piled up like a small mountain: Near 4084, there are 85 ETH sell orders glaringly piled up, which is not something retail investors can create, it's clearly large funds 'suppressing prices to unload' - first pressing the price near 4084, waiting for retail investors to think 'it can rebound' and then directly selling off and fleeing.
Buy orders are pitifully scarce: Looking at buy orders, they are all small orders like 0.01 and 0.05, with no large funds stepping in to support; now the buyers are all stubborn retail investors, while the main players are secretly throwing their chips to you.
In summary: entering the market now means becoming a 'greater fool'; don't be fooled by the nonsense of 'buying the dip at halfway up the mountain'!
4. Practical strategy: Better to be out of the market than to be liquidated!
Different types of players must adopt different strategies tonight; the core is simple: don’t let your principal lose any more!
1. Short-term traders: 2 moves to save your life
Reduce positions on rebound: If ETH rebounds to around 4140, regardless of profit or loss, reduce part of your position first - if it can’t break through 4140, it will definitely fall further; reducing positions early means less loss.
Stop loss on break: As long as 3883 is broken with volume, regardless of how much you lose, immediately stop loss and exit! Don’t think about 'waiting for a rebound to sell'; by that time, you might not even have the chance to sell.
2. Dip buyers: Hold on! Wait for these 2 signals before making a move
Now is not the time to buy the dip; it's 'sending people to their doom'. You must wait for these two signals to appear before considering entering the market:
MACD must reverse first: You need to see the green bars turn into red bars, and MACD forming a golden cross - this indicates that the bearish energy is almost exhausted, and the bulls will start to exert power;
Stand firm at 4140: Not only does it need to rebound above 4140, but there also needs to be volume support (for example, volume must increase by more than 30% compared to before) to confirm that 4140 has changed from a 'resistance level' back to a 'support level', which is the only safe signal.
Finally, to speak frankly: the negative news from the media has not all been released, and the technical side is under bearish control. Tonight's defense of 3883 is the critical key to determining the life and death of your principal - if it can hold, there is still a chance to wait for a rebound; if it can't hold, those who run fastest may lose less, while those who run slowly may be cut until it hurts!
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